The French Constitutional Council has found constitutional the statute creating a more flexible job market for young people, called in France CPE (Contrat premier emploi/ contract first job). You can read the decision here, if you read french.
The ball is now in the end of the President of the Republic, who has to sign the statute to make it enforceable. Needless to say, trade unions and a large chunk of the civil society is pleading against the signature.
The argument is the following: to enforce that statute would merely increase the social conflict that has plagued France for the last two months.
For once, I am with Villepin, the prime minister who wants the statute so badly. In order to do so, his popularity is clearly collapsing. This is in a way a very good sign: Villepin is not a populist. Whether he's right or wrong, this is another issue.
I personally believe that the job market is badly in need of a reform. France has to choose between a stagnant job market with a lot of protection for few people, and a more flexible market with less protection but more opportunities.
A sacrifice of some sort is needed, and the choice is not immediately clear. But given the present context of economic crisis, and gap between old and young generations, Villepin's choice is probably the best option.
Having said that, I am skeptical as to whether the statute will yield results quickly enough to make french people change opinion as to the necessity of some needed reforms. But if the reform does not work now, it will have to be much more radical in few years. Look around in Europe: Germany itself, the most powerful engine of European economic integration, is struggling with much needed reforms.
The darker side of this story is that the right wing contestant of Villepin, Mr Sarkozi, may be unduly strenghtened by the little popular initiative of Villepin.