French farce over 35-hour week

FRANCE'S 30,000 bakers are a stoic bunch, accustomed to rising at three each morning to prepare the nation's breakfast baguettes and croissants.

So the sight of these small traders parading in the streets of Paris is yet another sign of how the government's Utopian 35-hour working week has gone awry. Not only is it unworkable in small firms - as the bakers, whose hours are often double those prescribed, make clear - but a measure that was supposed to pay for itself now seems likely to land the government with an annual bill of £9.5bn.

Put another way, it introduces a back-door tax of £700 a year per employee, which will weigh most heavily on those who choose to work longer or are obliged to do so.

Supporters of the 35-hour week legislation back in 1998 argued it would be self-financing. Cuts in social charges for companies that allowed employees to work four hours fewer each week for the same pay would be balanced by additional tax and charges paid by the 300,000 extra staff that companies would need. But three years on, as the last few hours-cut agreements are being negotiated with trade unions, two key failings have become clear.

First, companies have not hired as many extra workers as expected. The bureaucracy is a nightmare. And in the current economic climate, the law, which cuts social charges for companies that sign up, is a convenient device to finance reduced working time without lay-offs.

Former finance minister Dominique Strauss-Kahn says that in the private sector the balance sheet of job creation is zero. 'Officially, 250,000 jobs have been created, but the administrative constraints must have destroyed as many,' he says.

Second, the government has failed to provide the funds needed by public sector employers or contractors to hire additional staff, or provide training to ensure they are available. The problem is most acute in the health service, which is struggling to find an extra 45,000 nurses and 2,000 doctors.

With a presidential election due next spring, opposition politicians are beginning to focus on the prospect of a £9.5bn hole in public finances and the commercial consequences of the changes.

For French voters, the signs are everywhere. Post offices close early, exhibition rooms at the Louvre are shut and lunch is available only on Thursdays and Fridays at Plaza Athènèe, the Paris restaurant of France's most distinguished chef, Alain Ducasse.

Five years ago, an unremarked law banned the sale of cars containing asbestos from 1 January 2002. On the eve of rendering the vehicles of millions of voters worthless, the law is to be annulled.

Ditching the 35-hour week may prove equally necessary. But it is likely to prove a great deal more difficult.