While President Francois Mitterrand basks in public approval of France's role in the gulf victory, Prime Minister Michel Rocard must deal with the war's costliest consequence: rising unemployment. War jitters, added to an economic slowdown, caused hiring freezes and layoffs of temporary workers. The result was a jump in joblessness to 9.2% in February, up from 7.4% the previous month. The rise is the biggest since 1984, when companies started vast restructuring programs.

During the boom years that started in 1988, France created 800,000 jobs. However, employers and unions complain that basic structural problems persist. Among deterrents to new hiring are Europe's highest levels of corporate taxation and social charges.

To stem layoffs, the government has started bailing out faltering companies. But unions say they will make employment the key issue in contract bargaining this year. Mitterrand and Rocard need to act swiftly to prevent unemployment from rocking an otherwise successful Socialist government.

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