Thumbwitch, it's hard to explain succinctly. So I will have to be long-winded!!
The system was pretty good till the late 80s, when quotas were imposed for pass rates in the baccalauréat and when schools also began to struggle with new generations of less disciplined and motivated pupils. But it gave pupils from all horizons a very wide and in-depth education (not encouraging independent thought enough, admittedly). For a long time it was what the French call a 'social elevator', providing children from even the poorest backgrounds with the opportunity to do well and gain access to good jobs.
It is however a very unwieldy system, as all teachers are state employees. They pass a national competitive exam to become a teacher, and once recruited they do a year's training where they teach one or two classes and also have training in teacher training schools (which are really not great, far too abstract and theoretical, not enough concrete help in facing class). You don't teach where you want: everyone has a certain number of points based on experience, etc., and they ask to be posted in specific regions, but can end up being sent anywhere in the country, especially at the start of their career, until they accumulate points and can get into the region of their choice.
The system is obviously not ideal in certain ways, but Sarkozy has addressed other problems: he has decreed that half (yep, 50%) of all teachers who retire are not to be replaced. Over the last 3 years, the number of posts available has been slashed (by 16000 this year, for example). Schools are having trouble finding teachers to replace absent staff or those on maternity leave, so they are using uni students who have no teaching qualifications. This problem may in time become less catastrophic, as the gvmt is handily slashing the number of teaching hours in core subjects, and scrapping smaller-size groups for language lessons, etc., so fewer teachers will be needed.
The competitive exams are being reformed, to make them less academic. So an aspiring English teacher whose English is abysmal but who can answer a question about "how to act as a responsible and ethical civil servant" [sic] may well pass.
The year's combined teaching/training is being scrapped (pricy to pay teachers who don't teach full time), so those who have just passed their exam will be placed in front of up to 7 classes of different levels, and have to get on with it. They'll be 'accompanied' by an experienced teacher for 5-6wks in Sept/Oct, then will teach alone till Jan/Feb when they have some training (to be defined by the new teachers themselves!).
In Sept/Oct the 'accompanying' teacher's class will be 'taught' by a series of university students considering teaching as a career, with no experience or qualifications. In Jan/Feb the new teacher's class will be 'taught' by a series of similar students.
Parents will be fighting to take their kids out of the system once it becomes clear that some classes will miss up to 12 wks real teaching in the year. And in a few years time, I think the competitive exam itself will be scrapped, so teaching levels will drop dramatically.
But the solution is simple: the same gvmt which has halved the number of posts available in the state system because the coffers are empty has just doubled (and in some subjects quadrupled) the number of jobs available in private schools.
The whole public sector is being systematically and cynically dismantled.
Sorry that was so long.