Nov. 8 (Bloomberg) -- President Jacques Chirac declared a state of emergency to quell spiraling urban violence, applying for the first time in France a 50-year-old law that authorizes curfews and warrant-less searches.

``The measures must be implemented very rapidly,'' Chirac told a Cabinet meeting today in Paris, spokesman Jean-Francois Cope said. The 1955 curfew law was passed to curb unrest in Algeria during that country's war of independence between 1954 and 1962. It was used again in French New Caledonia in 1985.

Chirac's government has failed to contain the rioting that has left one person dead, 6,000 cars torched and 1,550 people, including some as young as 12, under arrest. The riots, which began in Paris's suburbs on Oct. 27, have spread to cities such as Lyon, Toulouse, and Marseille.

The 12 days of riots mark the longest stretch of unrest in France since a student uprising in 1968, reflecting tensions in neighborhoods marked by large immigrant communities and youth unemployment of more than 30 percent.

It puts pressure on the government to better integrate largely Muslim communities, and sets immigration and equal opportunity at the center of the political debate 18 months before presidential elections.

`Firmness and Calm'

``The government's policy will be measured firmness and calm,'' Interior Minister Nicolas Sarkozy said in a briefing in Paris. The measures will allow local officials to determine whether to impose curfews. They will also allow police to conduct searches for weapons without a warrant.

The curfew order ``is a measure of the gravity of the situation,'' Michel Gaudin, chief of France's national police, said at a press conference in Paris.

Imposing the emergency measures ``sends a message of astonishing brutality to the youth of the suburbs,'' the newspaper Le Monde said in a front-page editorial today.

Prime Minister Dominique de Villepin said in parliament today that breaking the curfew would be punishable by as many as two months in jail.

``We're facing determined people, structured gangs, organized crime that doesn't hesitate to use any means to create disorder and violence,'' he told lawmakers. ``Restoring order will take time.''

Aid Package

He proposed a package to aid residents of the afflicted ghettoes. He plans to increase by 100 million euros ($118 million) subsidies to local associations, add 5,000 teaching assistant posts, create 15 zones with tax breaks to encourage job creation, and offer 20,000 work contracts with local governments.

He said there are 750 ``sensitive urban areas'' where all unemployed youths under 25 will be called in by government employment agencies within three months. He also said he'd set up an anti-discrimination agency.

``We need a serious discourse that goes beyond the question of law and order,'' said Christophe Bertossi, a research fellow at IFRI, the French Institute of International Relations ``These people feel excluded from the core advantages of France. They are French citizens but they don't feel it. What was missing from the Prime Minister's discourse was a clear narrative saying that we are all French, that we all belong here together.''

Suburban Phenomenon

The emergency measures will be in place for 12 days, Cope said. Chirac will hold another Cabinet meeting this week to present a bill aimed at converting the measures into law.

French police said 1,173 cars were torched in 226 districts in cities last night. Almost a 100 people have been sentenced and jailed so far, de Villepin said.

The riots have not affected urban centers. They've been confined to suburbs with government subsidized projects that house large populations of immigrants from Algeria, Morocco, Tunisia and other former French African colonies.

The number of vehicles burnt has been falling, with last night's count smaller than the 1,408 cars torched in 274 towns the night before, Gaudin said. About 330 people were arrested last night, down from 395 the night before.

``The intensity of the violence is falling and the number of attacks against public buildings is going down in terms of the damage,'' Gaudin said. ``Things are quieting less in the provinces than in Paris, with big cities which remain violent including Toulouse, Lyon, and Saint-Etienne.''

Euro Decline

About 84 public buildings, including police stations and schools have been burned down since the riots began, Gaudin said.

The euro fell to a two-year low against the dollar as incidents of violence were reported in Germany and Belgium. Arsonists in Berlin may have copied rioters in France, German police said. Five cars were also set on fire in Brussels last night, Agence France Presse reported.

The euro weakened to $1.1777 at 6:41 p.m. in Paris from $1.1805 late yesterday in New York on the riots and after finance ministers urged the European Central Bank to refrain from raising interest rates.

``Violence will surely continue to weigh on the euro,'' said Michiyoshi Kato, a vice president of foreign exchange sales in Tokyo at Mizuho Corporate Bank Ltd., a unit of Japan's second- biggest lender by assets.

The riots erupted after two boys, aged 15 and 17, one of Tunisian origin, the other from sub-Saharan Africa, were electrocuted on Oct. 27 by high-voltage equipment in an electricity substation where they took refuge fleeing a police check in the Paris suburb of Clichy-sous-Bois.

A 61-year-old man beaten during the violence last week died yesterday, making him the first fatality in the unrest.

`Sensitive Areas'

De Villepin's call for increased spending on training programs comes amid rising unemployment among immigrants. Last year, 17.4 percent of immigrants were unemployed, compared with 9.2 percent for non-immigrants, says Insee, the Paris-based government statistics office. For the same education level, immigrants are more likely to be unemployed, it said.

``Youth unemployment reaches almost 40 percent in some areas,'' de Villepin said. He added that the goal of the government will be to give unemployed youth living in France's ``sensitive urban areas'' a work contract, an internship or training in coming months.

To contact the reporter on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net.

Last Updated: November 8, 2005 12:59 EST