Have you read Esping-Anderson's work on comparative welfare regimes? He goes into some good historical detail on why non-Scandinavian continental Europe adopted policy frameworks that so favor incumbent workers (in contrast with the Nordic and Anglo countries,) but it's a pretty path-deterministic account, so doesn't bode particularly well if one's looking for reform.
I’m familiar with it, but I’ve never read Esping-Anderson himself.
I do think the Continental model can be reformed, though. The pension and health care entitlements of the incumbents probably cannot be reformed until the crunch, but the entitlements and protections for the marginal and unattached probably can be.
There is a broad left coalition that resists state action against pensioners, state employees, and protected workers. That was there in the actions of 1995, 2007, and 2010. Marginal workers should not be able to command the same level of resistance. The German Hartz reforms were implemented cleanly.
Unfortunately, that isn’t how things work in France …
CPE was introduced by the Government as an amendment (n°3) to the “Statute on the Equality of Opportunities” law. This law was proposed by Prime Minister Dominique de Villepin allegedly to tackle a 23% unemployment rate among the young, and also as a response to the civil unrest in October 2005. The reasoning of the government for introducing CPE was that unemployment was one of the major causes of lawlessness in poorer neighbourhoods, that workforce laws putting the burden of proof for valid reasons for dismissal on the employer discouraged hiring, especially of people with “risky” profiles, and thus that making dismissal easier would improve the employment prospects of such youngsters. …
The law has met heavy resistance from students, trade unions, and left-wing activists, sparking protests in February and March 2006 (and continuing into April) with hundreds of thousands of participants in over 180 cities and towns across France. On March 18, up to as many as 1.5 million demonstrated across France, over half of the country’s 84 public universities were closed because of student blockades, and Bernard Thibault, the leader of the CGT, one of France’s five major labour unions, suggested that a general strike across the country would occur if the law was not repealed. A big march was prepared for April 4, while students’ organizations had already called for a general strike. In the biggest student movement since 1968, mass meetings were held in many universities (In Toulouse over 4,000 students occupied the rugby stadium to hold their meeting). Motorways were blockaded and employers organisations offices were occupied. The actions were (unusually) supported by all of the main trade union federations and all the Left political parties (more or less enthusiastically). The protests spread to high schools, and involved large numbers of young people both from prestigious universities, and from technical high schools and other places of education drawing a mainly working class student body. …
On the evening of March 31, President Chirac announced in an address to the nation that he would promulgate the law, but asked the government at the same time to prepare a new law including two modifications: the trial period would be reduced to one year, and employers would now have to give a reason for the dismissal of the employment. However, Chirac did not specify whether this reason would be a juridical motive or a simple letter without any juridical value. He also asked employers not to start using the contract until these modifications came into force, but suggested no means of enforcement. Chirac’s paradoxical call (officially promulgating the law while unofficially asking at the same time for its suspension) has only baffled both partisans and opponents of the text. …
On April 10, the French government decided to withdraw the CPE and rewrite it by introducing new measures. This decision appears to be an about-face for Dominique de Villepin.