France's Labor Rules Stifle Business Growth

It's better to stay small than to hire employees you can't fire

Europe needs jobs, and French entrepreneur Daniel Joutard wants to create them, hiring more employees for his skin-care products company. Yet he can't take the risk—in large part because of France's inflexible workplace protections.

The 37-year-old is among thousands of small- and medium-size business owners who will be crucial to helping France—like other countries in Europe—reduce a double-digit jobless rate, and ultimately shrink its hefty state budget deficit by bringing in more tax revenues.