On the sidelines of his second visit to the Agricultural Show this Tuesday, February 27, Gabriel Attal said he was “in favor” of “reopening the construction site” of Unemployment Insurance in order to achieve a “social model which encourages more ‘activity”. Speaking to RTL, the Prime Minister declared that the social partners must continue their negotiations “until the end of March”. “So we will take stock in the coming weeks. I am in favor of us being able to move forward on this issue,” he added.
Gabriel Attal’s statements come as clouds gather over the French economy. The slowdown in growth is combined with a worsening of the public deficit and a less dynamic labor market. The unemployment rate increased by 0.4 points in one year, reaching 7.5% of the active population in the fourth quarter of 2023. This economic slowdown, less pronounced than in Germany and the United Kingdom – both of which entered recession -, coincides with the end of “whatever it takes” and the long-term installation of restrictive monetary policies. .
Heading towards full employment
In this burning context, the government is seeking to drastically limit public spending. On February 18, the Minister of the Economy, Bruno Le Maire, announced that the state budget would be cut by 10 billion euros. Faced with the alignment of red signals, the number two in the government considered opting for the “path of courage”, favoring austerity over a tax increase.
At the same time, the executive intends to keep the focus on full employment. During his press conference held on January 16, Emmanuel Macron announced an “Act II” of the labor market reform, giving an appointment in the spring. From the Elysée, the Head of State outlined this new act, intended to “encourage the creation and resumption of employment”. He held an identical line the next day in Davos, where he announced that he wanted to “tighten the rules of unemployment insurance”.
Unédic accounts degraded
After the reforms of 2019 and 2023, the government is once again raising the specter of a tightening of the rules for compensating the unemployed. On February 25, Gabriel Attal confirmed in The Sunday Journal that the deterioration of Unédic’s accounts was “currently being studied”. Impacted by the bad winds that are shaking the economy, the joint body responsible for managing unemployment insurance revised downwards, on February 20, its surplus forecasts for this year. Initially estimated at 5 billion euros, Unédic’s surplus is now revised to 1.1 billion euros.
To “encourage more activity”, the executive is studying the hypothesis of a reduction in the duration of compensation for the unemployed. “We went from 24 months to 18 months of compensation duration, we can further reduce it. We can also accentuate the degression of allowances, this will be part of the discussions,” warned Gabriel Attal in the columns of JDD. This new reform would respond to “the expectation of the French to have a social model which encourages the return to employment”, he estimated this Tuesday morning.
“We will continue to reform”
These announcements come the day after the harsh declarations made by Edouard Philippe in Opinion. “We are not reforming much,” said the president of the Horizons party, calling for thinking of public debt as a “public obsession”. In response, Gabriel Attal assured Tuesday morning: “It is obviously a priority to reduce our deficits, to clean up our accounts for future generations.” And added: “We will continue to reform.”
Few other elements relating to the tightening of unemployment insurance have so far filtered out. On February 18, the Minister of Labor, Catherine Vautrin, declared on RTL that “everything” would be done “to be as close as possible” to full employment, however ruling out any reform or removal of the conventional termination system. However, the first avenues set out by the executive arouse concern among the social partners. The latter must sign a memorandum of understanding relating to the rules of Unemployment Insurance every two to three years.
An agreement concluded last November by the CFDT, CFTC, FO and employers was not approved by Matignon, arguing that it did not take into account the changes brought about by the pension reform, promulgated in April 2023. “We are worried about respecting the word given”, declared Olivier Guivarch (CFDT) to AFP, while Denis Gravouil (CGT) denounced on BFM a “systematic stigmatization of the unemployed”.