After the slap in the budget deficit, the government is looking to make savings. Gabriel Attal brings together the entire government in Matignon on Wednesday morning for a seminar resembling a Council of Ministers devoted to work, at a time when social spending such as unemployment insurance is in the executive’s sights to fill the gap. deficit that spiraled out of control last year. The Prime Minister will then be questioned by TF1 on the 8 p.m. news.
“We will continue on this path of rigor and responsibility always with a common thread (…) that of work” because “the more French people we have working, the more possibilities we will have to balance our finances”, assured the Prime Minister Tuesday, citing unemployment insurance reform.
“De-cardiardization” and four-day week
According to Matignon, the government seminar will focus on encouraging people to return to work, including the contested reforms of the RSA and unemployment insurance, on “de-employment” or low wages, and on new forms of work like the four-day week, still at the experimental stage.
The government is looking for savings after the unprecedented slippage in France’s public deficit, which reached 5.5% of GDP in 2023, according to INSEE. That is 15.8 billion euros more than what the government had planned, complicating the debt reduction objective yet reaffirmed by the Minister of the Economy Bruno Le Maire, who excludes increasing taxes.
Chain savings
Ten billion euros in cuts have already been made in mid-February on the 2024 budget, particularly in the sectors of ecological transition, work or education, in response to less dynamic tax revenues than expected in 2023. But additional savings this year will be necessary, warned Mr. Le Maire, refusing for the moment to give an estimate. And it is especially in the 2025 budget that efforts will have to be made, estimated by Bercy at “at least 20 billion” euros.
Among the avenues considered by the executive to boost employment and save money is a new unemployment insurance reform that the unions are contesting, after the controversial ones of 2019 and 2023. Gabriel Attal intends to “reopen” this project, by defending “a social model which encourages more activity”.
Possible reduction in the duration of unemployment compensation
Bruno Le Maire has been repeating for weeks that the duration of compensation for the unemployed must be reduced, arguing that structural reforms are necessary to achieve full employment. He pleads for a “definitive” takeover by the State of unemployment insurance, currently managed by the social partners.
According to a majority executive, the government is looking for “financial margins” but on work “there are few” while several structural reforms have already been undertaken, from pensions to RSA. The reduction in the duration of compensation would take at least one year to produce its effects on public accounts, “between the time of negotiation and that of implementation”, according to him. But “the signal is interesting for financial institutions and the markets”, at a time when France’s rating could be downgraded by the major agencies in the coming weeks.