Unédic has revised its financial forecasts, anticipating a surplus of 300 million euros in 2024, a significant decrease from a previous projection of 900 million. This adjustment comes amidst ongoing negotiations about unemployment compensation and employment for seniors. By 2027, the organization expects its debt to reach 44.3 billion euros, influenced by state levies and the lingering effects of COVID-related expenditures. Amidst budget constraints, social partners are urged to find additional savings while discussing progressive retirement options.
Unédic, the organization overseeing unemployment insurance, recently announced a reduction in its financial outlook for the upcoming years, coinciding with the resumption of complex discussions regarding jobseeker compensation and policies for senior employment.
The joint committee shared projections extending to 2027, forecasting a surplus of 300 million euros for 2024, a significant drop from its previous estimate of 900 million euros issued in June.
Looking ahead, the organization anticipates a surplus of 1.8 billion euros in 2025, followed by 3.5 billion euros in 2026, and reaching 9.4 billion euros in 2027, assuming no further deductions by the State from the unemployment scheme’s accounts in that year.
The organization cautioned that the financial balance has been negatively impacted not only by a deteriorating economic environment but also by these deductions, mainly due to reduced compensation for exemptions. For example, without these levies, the 2024 surplus would have been projected at 3.1 billion euros.
In this challenging climate, Unédic is facing difficulties in managing its debt, which it estimates could rise to 44.3 billion euros by 2027. The organization highlighted that without State levies, this figure would have been 31.3 billion euros. A significant factor contributing to this debt includes the ‘Covid debt,’ resulting from emergency measures designed to sustain the job market, which amounted to 18.1 billion euros.
During a press conference, Unédic’s president, Jean-Eudes Tesson (Medef), pointed out how State policies affect the unemployment scheme’s financial health, citing the persistent Covid debt, the incomplete compensation for exemptions, and the costs associated with cross-border workers, which add approximately 800 million euros annually to unemployment insurance expenses.
He emphasized that the increasing frustration regarding these issues is palpable and also mentioned the influence of the ‘Covid debt’ and the funding for France Travail, which currently makes up about 11% of revenues.
A Call for Action
Patricia Ferrand (CFDT), Unédic’s vice-president, urged the State to take a more active role in European negotiations concerning border workers, underscoring the importance of this issue.
These revised forecasts come as trade unions and employer organizations engage in fresh negotiations focused on unemployment insurance and senior employment, aiming to reach an agreement before November 15.
While Tesson noted that these new figures likely won’t significantly alter the negotiating landscape, he acknowledged that adjustments to existing data would be necessary for the discussions.
The social partners are building upon an agreement reached in November 2023, which had not received government approval due to concerns about provisions for seniors.
This initial agreement, endorsed by CFDT, FO, CFTC, and employer representatives after arduous negotiations, proposed improvements in unemployment insurance eligibility criteria (requiring individuals to have worked for at least five months, rather than six, within the last 24 months) and a reduction in employer contributions from 4.05% to 4% of gross salary.
The signatories had anticipated saving 440 million euros over the 2024-2027 period by increasing the age limits for extended compensation; however, negotiations concerning senior employment stalled in April.
Now, the social partners must navigate the unemployment insurance discussions with a tightly constrained budget. Labor Minister Astrid Panosyan-Bouvet has tasked them with finding an additional 400 million euros in annual savings.
Regarding older workers’ employment, unions and employers are encouraged to explore methods to facilitate progressive retirement, which remains underutilized in France. This topic was a key point of contention during earlier discussions, with unions advocating for access to progressive retirement rights from the age of 60.