He is trying to find a path of compromise within the government, by not retracting the law he protects Villepin and is obviously trying to divide the movement against the the CPE and the CNE. I think the reaction from the movement is going to be that this not going to be enough - the demand has been for the retraction of the law and Chirac's proposition isn't going to cut it.
Today there small groups of students roaming around town with loud hailers, handing out flyers asking people to attend the demomnstration on Tuesday the 4th and holding up placards at intersections asking people to hoot if they are against the CPE and CNE. Motorists were hooting in support of the students and you get the impression that most people are aware of what is going on and are in support of the movement against the CPE and CNE.
If this level of mobilisation continues and isn't divided by Chirac's speech, because 1 year is just as ridiculous as 2 years and I don't think people are going to be duped by it, then I think we are looking at a demonstration on Tuesday that will head for the record books.