France needs to make itself more competitive. Its industry is suffering and its exports are losing out as its companies have to work with some of the most labour-friendly legislation in Europe. This is why even a dyed-in-the-wool Socialist like French President Francois Hollande has insisted that his government’s plan to reform the labour law will not be withdrawn, despite growing agitation and the threat of more strikes.

The new law offers the “best performance for businesses and offers new rights to employees”, Hollande said yesterday as he tried to face down the growing opposition.

Hollande’s plan will do no more than bring France more in line with the rest of Europe, even though 46 per cent of the French people oppose Hollande’s changes. The new law will not only make it easier to recruit and dismiss employees, but will also allow firms to negotiate working weeks longer than the current 35 hours, which is the lowest in the world.

Hollande plans to allow firms greater freedom to reduce pay and lay off workers, which currently is strongly regulated in France. All of this is seen as normal in the rest of the European Union (EU), as it struggles to become more competitive against exports from countries like India and China with lower cost base and equal technology, but the powerful French unions see this as an attack on their members’ basic rights.

The outcome of this crisis will have a powerful effect on the next presidential election in 2017. Hollande is already deeply unpopular and there is little chance that this row will enhance his standing. So his fellow Socialists are lining up to replace him, with Prime Minister Manuel Valls as one of the front-runners.

The centre-right party now called the Republicans has so many potential candidates that it is embarrassing, but it also faces a challenge from former president Nicolas Sarkozy, who is also centre-right and the far-right will field Marine Le Pen as she seeks to capitalise on the wave of anti-immigrant sentiment sweeping Europe.

The irony is that many French governments have tried to do what Hollande is now attempting. Sarkozy managed to increase working hours, but Hollande undid that when he first took power and reinstated the 35-hour working week.

Whoever gets the presidency will have to take up the challenge of making France competitive or else the French economy will continue its downwards slide.