France Slashes Unemployment Benefits
January 8, 2004
French President Jacques Chirac is vowing to make 2004 the Year of Employment. And new rules on unemployment that cut benefits dramatically and attempt to get the chronically unemployed back to work are part of the plan.
For starters, unemployment benefits will be limited to 22 months instead of 30. This change will effect nearly 200,000 people. Evelyne Zylbermann is one of thos hit by the reforms. Until now, she received €1,400 ($1,780) of unemployment benefits per month. Starting this month that will be cut to €400 per month in emergency benefits.
“I don’t know what I should do,” Zylbermann told Deutsche Welle. “I have rent and insurance to pay and a child to feed. What am I supposed to do, I don’t know.”
Reforms are result of negotiations in 2002
Like Germany, France is in the midst of a reform course aimed at strengthening the economy. With unemployment pushing 10 percent, this is one area of focus. The changes going into effect are the result of negotiations between business and union leaders in 2002.
“The challenge in 2004 is to make the most of the return of growth with one priority: employment,” Chirac said in a New Year’s address. Indeed, French voters rank unemployment as their top concern.
The changes to unemployment rules being implemented in France this year do not go as far as the reforms passed recently in Germany, which will cut unemployment benefits to 12 months starting next year. But they have nonetheless sparked criticism and protest from the media and union leaders.
“It will be those with the fewest means who will pay the price of unjust policies,” said Le Monde.
Will reforms encourage growth?
Francois Dessenty, head of CGT, the largest union in France, questioned whether the unemployment reforms will encourage growth.
“These measures don’t make sense,” Dessenty told Deutsche Welle. “It isn’t only the unions who know that unemployment lasts longer when there is less financial support for the unemployed. That means that the cuts won’t only push the jobless into poverty, they will also make it more difficult for them to eventually find a new job.”
Francois Chereque, head of the CFDT union, characterized Chirac’s plans as political posturing. “One gets the impression the government is in a hurry now that regional and European elections are coming,” Chereque said in an interview with Le Monde. There are French regional elections in March and European Parliament elections in June. “That said, it’s good news to see Mister Chirac is finally making jobs the priority for 2004.”