A meeting resembling a Council of Ministers is being prepared this Wednesday morning in Matignon. Gabriel Attal brings together the entire government for a seminar devoted to work at a time when social spending such as unemployment insurance is in the executive’s sights to make up for the deficit that slipped last year. The Prime Minister will then be questioned by TF1 on the 8 p.m. news.
“We will continue on this path of rigor and responsibility always with a common thread (…) that of work” because “the more French people we have working, the more possibilities we will have to balance our finances”, said assured the head of government on Tuesday, citing the unemployment insurance reform. According to Matignon, the government seminar will focus on encouraging people to return to work, including the contested reforms of the RSA (active solidarity income, editor’s note) and unemployment insurance, on “de-employment” or low wages, and on new forms of work such as the four-day week, still at the experimental stage. So many priorities that Gabriel Attal had developed in his general policy declaration at the end of January.
However, the government is looking for savings after the unprecedented slippage in France’s public deficit, which reached 5.5% of GDP in 2023, according to INSEE. That is 15.8 billion euros more than what the government had planned, complicating the debt reduction objective yet reaffirmed by the Minister of the Economy Bruno Le Maire, who nevertheless excludes increasing taxes.
Ten billion euros in cuts have already been made in mid-February on the 2024 budget, particularly in the sectors of ecological transition, work and education, in response to less dynamic tax revenues than expected in 2023. But additional savings this year will be necessary, warned Mr. Le Maire, refusing for the moment to give an estimate. And it is especially in the 2025 budget that efforts will have to be made, estimated by Bercy at “at least 20 billion” euros.
Among the avenues envisaged by the executive to boost employment and save money is a new unemployment insurance reform that the unions are contesting, after the controversial ones of 2019 and 2023. Gabriel Attal intends to “reopen” this project, by defending “a social model which encourages more activity”. Bruno Le Maire has been repeating for weeks that the duration of compensation for the unemployed must be reduced, arguing that structural reforms are necessary to achieve full employment.
He pleads for a “definitive” takeover by the State of unemployment insurance, currently managed by the social partners, via Unédic, a joint organization. Unions and employers renegotiate the rules every two to three years to take into account changes in the labor market. The leaders of the five major trade union centers called on March 18 to abandon a new reform and to “stop the populist stigmatization of the unemployed”.
A new meeting on “the life at work pact” between unions and employers’ organizations was also held on Tuesday. These negotiations relate in particular to the employment of seniors, to allow employees to stay in their jobs longer, while the legal retirement age has been raised from 62 to 64 years. This meeting was to be the last but given the poor progress, an additional session was added to the program on April 8. If the social partners do not reach an agreement, the State will take control.
According to a majority executive, the government is looking for “financial margins” but on work “there are few” while several structural reforms have already been undertaken, from pensions to RSA. The reduction in the duration of compensation would take at least one year to produce its effects on public accounts, “between the time of negotiation and that of implementation”, according to him. But “the signal is interesting for financial institutions and the markets”, at a time when France’s rating could be downgraded by the major agencies in the coming weeks.