France overhauls unemployment benefits to curb spiralling budget deficit

French Prime Minister Gabriel Attal has revealed that the country is overhauling its unemployment benefits system in an effort to get its spiralling budget under control.

The changes to the current unemployment benefits system are being made with the goal of moving France towards full employment, said Attal in an interview given to French publication  La Tribune du Dimanche on 26th May.  

Under the new scheme, compensation will be limited to a maximum of 15 months, down from 18, and people will have to have worked at least eight of the previous 20 months to qualify, instead of six of the prior 24 months.

“If we do not reform unemployment insurance, we risk stalling on the road to full employment,” said Attal. “This reform will allow us to create ever more jobs in our country.”  

The decree, which the Prime Minister said will come into force on 1st December, is being touted as a way to get more people back to work faster through “a social model more oriented toward activity”.  

Some of the highlights of the plan include a senior employment bonus, whereby retirees who go back to work in a job that pays less than their former occupation will still be able to collect their pensions alongside the new salary, up to €3,000.  

Additionally, the bonus-malus system for short-term contracts will be reviewed.  

The Prime Minister’s announcement came as no big surprise as the government begins taking measures to lessen its debt load in the wake of a report from the International Monetary Fund (IMF), who stated last week that the country’s deficit will be “significantly higher”- 4.5% versus the French estimate of 2.9% – by 2027 than that currently being predicted by the Palais de l’Elysée.  

Despite the news, Attal is taking a brighter stance, having told the La Tribune du Dimanche, “It is not a reform of the economy, but of prosperity and activity. The gain will be measured by a greater number of French people who will work, and therefore [provide] more funding for our system.” 

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