Effete fop he is, and may be, but he is a politician first. He's PM of France, and he wants to *remain* PM, so he will support...
the infowarrior
De Villepin has three problems. First, after the Muslims rioted, he promised that there would be more jobs available. This is just not going to be possible under the present circumstances, and the government cannot fund "make work" schemes sufficient to the task. In order to keep this promise, and possibly ensure the banlieues don't explode again, he has to loosen labour laws so that jobs can be created.
Second, without people working, he has a hole in his budget, which is only going to get worse. He has to get the economy and employment moving, otherwise French finances are going to look as laughable as their vows of fidelity.
Third, and this follows from the first and second points, now that he is committed to this course, the French electorate rarely rewards retreating in the face of tough decisions, even if the PM did what they wanted. His only hope is to grit it out and hope that the economy picks up once the law is signed.
Regards, Ivan
A fop -- but an ambitious fop. That's why.