Youth unemployment in France

The unemployment rate of developed countries in the EU is more than that of the US. One of the main reason for this is rigid employment i.e. the companies are less willing to fire workers. And consequently less willing to hire people. In general there is not much movement in and out of employment, therefore the high rate of unemployment stays put. Last year, disgruntled and dissatisfied with unemployment and the government’s apparent indifference to make any change to improve the employment rate, riots broke out amongst the youth in Parisian suburbs. Most of the rioters were in their 20's. France has one of Europe's highest youth unemployment rates. More than 20% of its 18 to 25-year-olds are unemployed - double the national average of 9.6%. In response the Chirac-Villepin government proposed and passed the First Employment Contract (CPE) which is suppose to come in effect from April. The CPE is new work contract for under-26s with a two-year trial period. In that period, employers can terminate the contract without having to offer an explanation or give prior warning. For other employees, the trial period is usually 1-3 months.
This however did not please the youth and unionist. Students at Sorbonne protested saying that the law will lead to lower job stability, slave-employment and exploitation. Labor and trade unions joined the protests. Unions said that almost 1.5 million protestors and demonstrator joined in for the protest on Saturday in which they demanded the law to be revoked within 48 hours.
I can see how the law may create some movement in the labor force, but then, I think that the law by itself will be ineffective to curb the rising youth unemployment rate. This law can instead worsen the situation of falling employment rate. It might discourage the youth from taking jobs where they can be easily exploited by the employers and can be fired any time for any reason. The government, I believe, ought pass laws that directly stimulate the market and create more jobs, instead of just creating movement in the labor market.
It’s interesting to see how effective the unions will be against the government. Prime Minister Villepin (who has presidential ambitions) is adamant about enforcing the law, whereas the unions and students have now threatened to go on a general strike.