Unédic has revised its financial forecasts for unemployment insurance, projecting a surplus of 300 million euros in 2024, compared to the previous estimate of 900 million. Upcoming negotiations on jobseeker compensation and senior employment are crucial, aiming for resolution by mid-November. The negotiations include potential savings of 440 million euros for senior unemployment benefits, though concerns arise over impacts on the unemployed. The government has urged the social partners to find additional savings amid a challenging economic context, with talks ongoing.
Unédic, the organization responsible for managing unemployment insurance in France, recently announced a downward revision of its financial forecasts. This comes at a crucial time as social partners have resumed challenging negotiations regarding compensation for jobseekers and the employment of senior workers. The joint body now expects a surplus of 300 million euros in 2024, a significant decrease from the earlier forecast of 900 million euros made in June. Projections for subsequent years anticipate a balance of 1.8 billion in 2025, 3.5 billion in 2026, and 9.4 billion in 2027, assuming there are no further state deductions from the fund.
According to Unédic, “the deteriorating economic landscape has impacted the financial balance” due to state levies, characterized by reductions in compensation for certain exemptions. For 2024, the balance could have reached 3.1 billion euros if not for these deductions. In spite of positive outlooks for the future, Unédic is grappling with a significant debt burden projected to reach 44.3 billion euros by 2027, which still reflects liabilities from the Covid crisis when emergency measures totaled 18.1 billion euros.
Negotiations Resumed
The latest financial forecasts coincided with the commencement of a new round of negotiations concerning unemployment insurance and employment for seniors. The aim is to conclude discussions by November 15. These negotiations build upon a previous agreement reached in November 2023, which was signed by notable labor unions including the CFDT, FO, CFTC, and various employers’ organizations, but ultimately lacked governmental approval due to insufficient provisions for senior citizens.
Prior expectations indicated that the deal would yield savings of 440 million euros from 2024 to 2027, primarily through an increase in eligibility age for extended benefits by two years. However, discussions concerning senior unemployment have stalled since April. The focus of Tuesday’s negotiations was to reassess the costs involved in implementing the financial terms of the November agreement.
Favorable Negotiation Climate
Olivier Guivarch, representing the CFDT, noted that the current climate is “advantageous for negotiation”. He highlighted that the revised costings indicate “slightly greater spending cuts than initially expected”. On the other hand, Denis Gravouil from the CGT expressed concerns, stating that the anticipated savings would ultimately come at the cost of the unemployed. He indicated that the extra savings could reach 800 million euros over four years and emphasized a return to discussions with a keen focus on addressing the critical balance issues.
During discussions regarding senior employment, a topic intricately linked with unemployment insurance, unions and management proposed four key areas for dialogue: enhancing social dialogue, conducting professional interviews for mid-career workers, implementing measures to support employment, and facilitating smoother transitions into retirement. The unions advocate for a phased retirement option, which is not widespread in France, arguing for accessibility without employer resistance, known as an “opposable right.” However, concerns remain that negotiations might falter on this crucial point, as they did in the spring.
Potential Shifts in Government Control
The “opposability” of retirement options is a clear “red line”, as stressed by Eric Chevée from the CPME representing employers. Employers are expected to present an initial draft of the agreement in the upcoming session next Tuesday, along with a preliminary proposal regarding unemployment insurance later this week. In a tight budgetary environment, Labor Minister Astrid Panosyan-Bouvet has urged the social partners to find an additional 400 million euros in savings annually. Olivier Guivarch (CFDT) noted that time may be limited for discussions surrounding this request, questioning its justification against the broader financial and political backdrop.
On the employers’ front, Mr. Chevée clarified that they are not dismissing this request out of hand, with Hubert Mongon (Medef) also expressing hopes to meet the financial targets if feasible. Should negotiations break down, there is a likelihood that the government may intervene. The CGT views the potential reintroduction of the Attal reform, which was widely criticized by unions as “harsh”, as a “threat used lightly by employers,” albeit one that they consider “largely hypothetical