After a weak performance in 2000-03 output growth recovered in 2004, somewhat more strongly than in most euro zone countries. It reached 2¼ per cent but, as in the rest of the euro zone, weaker growth is likely in 2005-06, while unemployment remains stubbornly high, currently around 10%. The origins of poor labour market performance, a central challenge for French policymakers, lie in a combination of measures themselves designed to protect workers, notably a high minimum cost of labour and strict employment protection legislation, as well high tax wedges on labour; a lack of competition in a number...