A frosty weekday at the end of the morning shift, and car workers are streaming out of the factory gate, coats buttoned up against the winter chill. But these employees, at the Peugeot car plant in Poissy, just west of Paris, will not be returning to work the next day. The factory is now operating short weeks, due to a slump in car sales. It shut down completely for four weeks over Christmas. And these workers are the lucky ones: they still have jobs, whereas 700 colleagues on temporary contracts have lost theirs. "There's a real fear that redundancies could be next," says Georges Martin, a union official who has worked here for 33 years.

The French may not be troubled by heavy mortgages or credit-card bills, but fears of unemployment are rising as recession takes hold. In November France's jobless total reached 2.1m, an 8.5% rise on a year earlier. Other European Union countries such as Spain and Ireland are seeing even sharper rises in unemployment, as Europe's economies head into what European Commission forecasts suggest may be their worst year since the 1970s (see chart). French unemployment, now 7.9%, could top 10% by 2010. Joblessness is growing fastest among under-25s, many of whom are being laid off as firms cut those on short-term contracts.

The government is most worried about the car industry, which directly employs 700,000 people in France (6,600 of them in Poissy), and indirectly 2.5m. This week François Fillon, the prime minister, told car-industry bosses that state help would go only to firms that kept production (and jobs) in the country. The Europe-wide concern that rising unemployment could provoke social unrest is particularly acute in France, where even in good times protesters take readily to the streets.

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