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ECONOMY

France offers more aid for bar owners as anger grows over closures

The French government has unveiled extra measures to help bar and restaurant owners as anger grows over closures.

France offers more aid for bar owners as anger grows over closures
"Stop the dictatorship" reads the sign over one of the few restaurants in Marseille that did not comply with the government's new rules an declined to shut down on Monday. Photo: AFP

Under the latest Covid-19 health restrictions, bars in 11 French cities – including Paris – have been ordered to close at 10pm while in Marseille all bars and restaurants must close altogether for two weeks.

This has sparked protests from bar owners in Marseille, while one of France's best known chefs has called for a national demonstration on Friday to express the anger of the industry.

“We need to make some noise, show that we are there, that we are dying,” said Philippe Etchebest, a restaurant owner in Bordeaux, best known as a judge in the popular TV show Top Chef France.

After receiving a delegation from the hospitality industry on Tuesday morning, the French government has now announced extra help for the sector, already reeling under the impact of the two-month closure during lockdown.

 

Finance Minister Bruno Le Maire has announced that the furlough scheme known as chomage partiel (partial unemployment) would be made fully available for all hospitality businesses until December 31st.

Whereas the rest of French businesses may access a pared-down version of the scheme, bar and restaurant owners will, along with the tourism sector, be able to get their employees salaries covered with 100 percent backing from the state.

“This will allow us to preserve jobs and the employees of this sector,” the economy minister said.

Le Maire also reiterated a previous promise to increase and extend the “solidarity fund” available to businesses which suffered big economic losses during the lockdown, which now will provide grants for all bars and restaurants whose incomes were slashed during this period of closures.

The fund, previously at €1,500 per month maximum, would be bumped up to €10,000 (the total amount a business receives will depend on their losses), the minister said.

“This sum will be available [to owners] over the course of October,” Le Maire told French press.

In addition to the help schemes, all establishments concerned by he new rules that saw their incomes disappear this period would “not have to pay social charges” on their employees' wages, Le Maire said. He did not provide further details on exactly how much income had to be lost in order to benefit from this measure.

To date there has not yet been a reaction from sector on whether the new measures were sufficient to call off Friday's protest action.

Etchebest had called all restaurant and bar owners and their employees to “gather in front of their establishments with a black armband” on Friday at 11.45am, just before lunch, to show that they were “drowning” economically speaking.

Etchebest, who was a guest at France Info’s evening show Les Informées on Monday, was speaking from his wine bar in Bordeaux, one of the 11 cities considered at a “heightened risk” by the French government, which means all bars must close their doors at 10pm the latest for a period of two weeks.

Restaurants in these areas can stay open later.

In Marseille, the city currently suffering the most in France from high Covid-19 rates and increased pressure on hospitals, both restaurants and bars had to close down completely for at least one week as of midnight on Sunday.

The government has said it will extend the period if the situation does not improve in the seven coming days.

Etchebest said the protest action would be in solidarity with restaurants and bars in Marseille and bars in all the 11 other cities concerned by the new rules.

Reeling sector

Health Minister Olivier Véran announced the new rules on Wednesday evening in a live speech to where he said swift action had to be taken to halt the deteriorating situation across the country.

But the new rules stirred up a deep-set discontent in the sector that predated last week's announcements.

France’s restaurants and bars were among the businesses who suffered the most from the two months of strict nationwide lockdown this spring. 

Prior to that, they saw their incomes drop during first the “yellow vest” protests every weekend –  especially in Paris where the biggest and most violent protests were held – and then during the transport strike movement, which saw their customer numbers plunge in December 2019 and January 2020.

Etchebest, who has spoken up several times about the sector's sufferings since lockdown, said he predicted “30 percent [of the sector] to go bankrupt” by the end of the year.

 

 

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POLITICS

France plans cuts to its generous unemployment system

France's prime minister, Gabriel Attal, announced plans to change the country's famously generous unemployment benefits system - cutting both benefits paid and how workers qualify for them.

France plans cuts to its generous unemployment system

During a televised interview with TF1 on Wednesday, France’s prime minister Gabriel Attal announced that the government would seek to reform the unemployment benefits system this year. 

Attal said that the goal would be “to have the parameters of the reform prepared during the summer, so that it can come into force in the autumn”.

This would mark the third time that the system – which has a budget of €45 billion per year – has been reformed under President Emmanuel Macron’s tenure. Previous changes have included adding extra requirements for job-seekers to search for work and undertake training courses.

Can you really get €6k a month on benefits in France?

During the interview, Attal laid out a few options for reform, without offering specific details.

Why change the system now?

The announcement came after it was revealed on Tuesday that France’s budget deficit had reached €154 billion – or 5.5 percent of GDP – and was set to rise even further over the next two years unless action is taken.

Both president Emmanuel Macron and his finance minister Bruno Le Maire have ruled out tax rises, and say that the money can be found through cuts to state spending. Attal echoed this during his interview with TF1.

Le Maire will present a package of cuts to ministers of April 17th, entitled the programme de stabilité (PSTAB).

OPINION: France has been in denial for decades about its ‘magic money tree’ spending

But reforming the unemployment system was on the cards even before the budget deficit news, as the president attempts to push France toward ‘full employment’ – defined as 5.5 percent of working age people officially without a job – by the end of his term in 2027.

In the fourth quarter of 2023, the unemployment rate in France reached 7.5 percent of the working population, according to data published by INSEE.

How could unemployment be modified?

Attal discussed several possibilities for reforming the system on Wednesday, each focusing on the parameters that are considered when applying unemployment benefits.

READ MORE: How generous is France’s unemployment system?

The first is the duration of the compensation. Currently, you can receive unemployment benefits for up to 18 months at a time if you are aged under 53; 23 months if you are 53 or 54; and 27 months if you are 55 and over. 

That being said, most people are not unemployed for that long.

This in itself is one of the previous reforms taken under Macron’s term – in February 2023, France reduced the unemployment compensation time from a maximum of 24 months for under-53s to 18 months.

Attal said that one option would be to reduce the duration of compensation “by several months (…) but I don’t think it should go below 12 months.”

The second option would be to increase the number of months required for one to access the benefit. As things stand, workers must have been employed for for at least 6 months (130 days or 910 hours) in the previous 24 months – there is no limit on the number of employers you have worked for in that time.

The period rises to six months in the previous 36 months if you were 53 years old on the end date of your last employment contract. 

Attal said: “We can imagine either saying – we need to work for longer or that the six months should be assessed over a shorter period.”

As for the third option, it would involve changing “how much you earn and how much this decreases [over time] to encourage people to return to work”, Attal said, without offering further details as to how the calculation of the benefit would be altered.

The current system determines the amount of monthly unemployment benefits based on percentage of your previous salary, rather than a flat rate. The gist is: the more you earned, the more you’ll get.

It’s worked out according to a rather complicated formula that gives job-seekers around 57 percent of average salary during their last 12 months of work.

There is a ceiling to this – the maximum amount is €6,615 per month (although you would need to have been earning more than €10,000 a month previously in order to get that).

After 12 months of unemployment, the rate is reduced and a new rule means that people under the age of 57 who previously earned more than €4,500 a month have their rate reduced after eight months.

Attal said this third possibility is “less to [his] liking than the previous ones, but we will let the experts and stakeholders work this out.”

READ MORE: How France’s bid to tackle ‘wild’ budget deficit could impact you

Would this bring France in line with its neighbours?

France’s current system is more generous than many of its European neighbours, especially due to the fact that benefits are offered after just six months of work.

In Germany, workers must have been employed for at least 12 months over the last 30 months in Germany to be entitled to six months of compensation. 

Meanwhile, in the UK, the minimum amount of time worked must have been at least 12 months over the last two years – longer than France’s six month minimum as well.

Several other European countries also apply a flat rate the benefits, rather than France’s percentage system.

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