Cutting jobless benefits still ‘taboo’ in France

France’s new finance minister provoked a storm at the weekend by insisting the idea of cutting the country’s generous unemployment benefits was no longer "taboo". However the reaction from his party and the president suggests it very much still is.

Cutting jobless benefits still 'taboo' in France
French jobseekers look for work. But should their benefits be cut or is it still a taboo subject? Photo: AFP

The obstacles facing the French government in its attempts to pass through key money-saving reforms have been made clear once again.

On Sunday the government’s new economy minister, the social-liberal Emmanuel Macron, sparked a furore by suggesting the subject of reforming France’s hugely indebted benefits system for jobseekers was no longer taboo.

“The system of unemployment benefits (assurance chômage) is in debt to the tune of €4 billion. Which responsible politician can be satisfied with that?” Macron told the Journal du Dimanche newspaper.

His words followed on from Prime Minister Manuel Valls’ comments in London last week when he suggested France needs to look at its benefits system for jobseekers – considered among the most generous in Europe.

Under France’s “one day worked, one day covered” principle, the “chômeurs” (jobseekers) are entitled to benefits of around 60 percent of their previous salary for the equivalent period of time they were employed, although up to a maximum of two years.

In France allowances can reach a maximum of around €6,000 a month, although this is only in a tiny majority of cases (0.7 percent).

Although the average payment paid out to jobseekers in France is just under €1,000 a month – less than the minimum wage – the fact it be claimed for two years, means the system is still seen by many as overly generous when compared to the rest of Europe, with only the Netherlands and Denmark offering better cover for the unemployed.

SEE ALSO: Is France the best country to be unemployed in?

But despite Macron’s apparent willingness to tackle a sensitive subject, the reaction to his words suggest that he is wrong to say it is no longer taboo.

Firstly Macron was taken to task by the leader of the Socialist Party Jean-Christophe Cambadelis, who reminded him that Hollande has already distanced himself from such a reform.

“If there are no taboo subjects on the left, then there are totems,” he warned. “And the first is that when the president speaks, ministers don’t come out and contradict him,” he said.

For their part the unions simply dismissed the Macron’s words and those of Valls as a “provocation”.

With the row in full swing on Monday Hollande was forced to step in releasing a statement via the Elysée Palace to insist that there would be no discussions around reforming jobseeker benefits right now, but it would “come in due course”.

The row symptomizes the problems Hollande and his government have in passing reforms aimed at reducing the spiralling public debt, even if many analysts and the general public believe it is necessary.

Recent opinion polls suggest a majority of the French public believe the benefits paid out to jobseekers should be reduced, if gradually, and are paid over too long a time period.

Certain experts agree there is a problem in a system that allows certain out-of-work managers to pick-up €4,000-a-month from the state for two years.

“I don’t think the French system is very fair. Less money could be paid out to the high earners so more people could be covered,” Philippe Martin from the National Centre for Scientific Research told The Local.

Yet Martin believes the chances of a reform are slim.

That’s partly due to the fact it's not the government that can make changes to the system, rather they must be agreed through negotiations between unions and employers' organizations, which are always fraught.

“I don’t know any other system like the French which is bankrolled by the state but effectively managed privately. The only thing the state can do is threaten to withdraw the money, but this hasn’t been mentioned yet,” said Martin, who has been surprised by Valls's and Macron's “aggressive” stance on the subject. 

The other problem is negotiations on this very issue of benefits took place earlier this year with the next set of talks not scheduled until 2016.

But the main obstacle to reform will be what Martin refers to as a little French “irrationality”.

“This shows a kind of irrationality in French society,” said Philippe Martin from France’s National Centre of Scientific Research.

“Even if the government feels it has a legitimacy to pass a reform because many polls suggest the public agree, the unions will simply inflame the situation, there will be strikes and protests,” he said.

“We will see conflict, just like always,” said Martin, adding that he doubts any “satisfactory” reform will take place right now.

“Not until things are calm and the economic crisis is over,” he said.

But Tomasz Michalski from Paris says why the system needs reforming calls for France's “generous” unemployment benefits is missing the point of what is really needed.

“Those few jobseekers who receive the larger allowances will have paid there dues, so to speak due the high amount of taxes they would have paid out of their salaries,” he told The Local.

“The problem here is that France needs a more flexible labour market. The whole labour code needs reforming.”

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