Analysis Tim Fawcett BBC News Online business reporter

Unions have in the past reacted with anger to economic reform

Two years ago the French government embarked on a programme of economic reforms.

The pensions system and other costly benefits were seen as brakes on French economic dynamism.

But saving social security from bankruptcy as well as bringing the government's budget deficit into line have proven to be tough propositions to sell.

Getting into debt

Key reforms More years worked to qualify for pension Reduction in some unemployment benefits Reduction in working week to 35 hours

France is one of the world's largest economies, but it also boasts a sizeable budget deficit - putting the country into breach of the European Union's 'growth and stability pact' rules which limit it to no more than 3% of GDP.

France, however, looks set to break through this ceiling for the third year running.

Adding to the burden, the government has to combat high unemployment rates, currently standing at 9.6%.

The previous - socialist - government hoped to create jobs by cutting the working week to 35 hours.

With salaries unchanged, this left companies with little money to hire more workers, but sparked widespread opposition from business.

Painful backlash

Under the conservative government, reform plans have been tougher on workers and recipients of welfare.

Employees are supposed to work longer to qualify for a pension. Some unemployment benefits are set to be cut back.

French voters - both in and out of work - have greeted the plans with derision.

We're not expecting any fundamental change to the government's economic reform package Dominique Barbet, economist BNP Paribas

And government proposals to introduce more private pension contributions have run into fierce opposition with bitter and disruptive protests.

French unions' appetite for taking to the streets has been whetted further by attempts to reform the health care system and reduce the role of the state.

Some progress

Despite the outcry, the French economy has been improving, albeit it slowly.

Growth is perking up. The country's trade balance is in surplus with most of its European partners.

And even though jobs are still scarce, at least employment is stable and inflation now declining.

Overall, the labour market has resisted the global economic slowdown and France has overtaken Germany as the so-called engine for economic growth in continental Europe.

Despite the poor result the centre-right government of prime minister Jean-Pierre Raffarin insists that reforms will continue, as will spending cuts.

And the reaction of France's financial community to Sunday's election result has been sanguine.

Dominique Barbet, economist at BNP Paribas in Paris says there will be little change on the economic policy side and most of the change if any will be political.