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ECONOMY

French government slashes unemployment benefits

The French government said Monday that jobseekers would see the amount of time they can claim benefits cut by 25 percent from next year as part of a contested reform designed to help fill vacant positions.

French government slashes unemployment benefits
France's Labour Minister gestures during a press conference following a meeting to unveil new unemployment insurance reform. (Photo by Bertrand GUAY / AFP)

Under the current rules, anyone under the age of 53 can claim a maximum two years of compensation after losing their job, while the over-55s are eligible for three years.

By reducing the time by a quarter from February 2023, Labour Minister Olivier Dussopt said Monday he hoped that 100,000 150,000 people would return to the labour market earlier than expected next year.

“We’re keeping one of the most generous systems in Europe,” he added in a comment designed to reassure workers worried about their rights being eroded.

The new regime was made possible by a law passed by parliament last week that gave the government powers to change the unemployment system by decree, depending on the state of the labour market.

READ MORE: Key points: The French unemployment reforms foreign workers should know about

The idea proposed by President Emmanuel Macron is that benefits would be available for longer during economic downturns and restricted during times of labour shortages.

Despite high inflation and the impact of the war in Ukraine, France’s unemployment rate has fallen steadily to 7.3 percent amid complaints from many employers that they are unable to find people willing to fill vacancies.

The head of the Medef business association, Hubert Mongon, hailed the change as “going in the right direction” in encouraging people back to work.

All of France’s trade unions have opposed the changes, which are part of centrist President Emmanuel Macron’s pro-business agenda designed to reduce the country’s chronic high unemployment and high levels of public spending.

Macron made reaching full employment — which would mean bringing the unemployment rate down to around 5.0 percent — one of the pledges of his successful bid for a second term in presidential elections in May.

The unemployment system changes drew support from the rightwing Republicans opposition party which helped pass the legislation last week, a rare moment of compromise in the divided and hung National Assembly.

Macron has been under pressure to give impetus to his second term, which was severely undermined when his allies failed to win a majority in parliamentary elections in June that saw major gains for the far-right and hard-left.

The previously supportive centre-right Le Point magazine questioned this week if Macron was a “Zombie President” in a front page article.

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POLITICS

Macron vs the unions: What happens next in France?

French President Emmanuel Macron is facing his biggest standoff with France's trade unions since coming to power in 2017, with the outcome of a series of strikes and protests seen as decisive for both sides.

Macron vs the unions: What happens next in France?

The 45-year-old leader has made raising the retirement age a signature domestic policy of his second term in office — something the unions and millions of protesters are determined to block.

After two days of nationwide strikes and demonstrations, AFP looks at what is likely to happen next on the streets, in parliament, inside the government, and in wider French public opinion.

On the streets

Labour leaders were delighted with their second day of protests on Tuesday, which they claimed had seen around 2.5 million people hit the streets, including in many small and medium-sized towns.

Official estimates put the figure at 1.27 million, compared to 1.1 million people during round one on January 19th, according to the interior ministry.

READ MORE: Calendar: The latest French pension strike dates to remember

Momentum is clearly with the unions who announced two further days of protests and strikes next week, on Tuesday and Saturday.

“The movement is growing and spread across the whole country,” the head of the hard-left CGT union, Philippe Martinez, said on Wednesday.

Nevertheless, unions no longer have the ability to paralyse the country and working-from-home practices mean most white-collar workers can easily adjust to transport stoppages.

The biggest fear of authorities is a repeat of the 2018 so-called “Yellow Vest” protests — a spontaneous movement drawn mostly from the countryside and small-town France that led to shockingly violent clashes with police. 

“The trauma was so big and the violence so great, I don’t see it happening again for the moment,” Bruno Cautres from Sciences Po university in Paris told AFP earlier this month. 

In government 

The government was expecting a rough ride — few major policy changes happen in France without protests, and former president Nicolas Sarkozy faced similar resistance with his pension reform in 2010.

Macron has faced numerous challenges from the unions in the past and has always succeeded in pushing through his pro business agenda and social security reforms.

The only exception was his first attempt at pension reform — also highly contested — which he withdrew in 2020 during the Covid 19 pandemic.

Prime Minister Elisabeth Borne has been the public face of the latest proposals, while Macron has kept his statements and appearances to a minimum, as is his habit.

But with the battle lines hardening and protests growing, the president might be forced to enter the fray. 

“I think the president will speak, but not right now,” a minister told AFP on condition of anonymity. “If he did it now, it would look like we’re panicking.”

In parliament

The draft legislation will be debated for the first time in the 577-seat National Assembly from Monday.

Macron’s allies are the largest group with 170 seats, but they do not hold a majority after a weaker-than-expected showing in June elections.

Support from the 62 rightwing Republicans (LR) party MPs will be essential.

LR has long supported raising the retirement age, but there are doubts over how many of their MPs will give the government their backing.

“I’m not asking the government to give in to the protests. This reform needs to be done,” LR parliamentary party chief Olivier Marleix said on Wednesday.

The lower house debate will finish on February 17th at the latest when a vote can be called — or the government could transfer it to the Senate or ram it through with controversial executive powers that dispense with the need for a ballot.

The bill is expected to pass the conservative-dominated Senate, where a vote is to take place by mid-March.

Public opinion

The latest polling figures show a growing majority opposes the reform and supports the protests, with roughly two in three people against the proposals.

Ministers have struggled to find winning arguments, at times arguing the changes are needed to reduce government spending, at others insisting they will make the pension system fairer.

“The government has not won with the argument that it is necessary,” Bernard Sananes, the head of the Elabe polling group, told AFP. “And it is fighting on another, more intense front which is that the reform is seen as unfair.”

In private, Macron’s allies insist their best hope is for parliament to quickly approve the legislation that will never be popular but might grudgingly be accepted as necessary.

“The question is how big the protest movement will be and how long it will last,” the minister told AFP.

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