Two weeks after French Prime Minister François Bayrou announced plans to stabilize the public debt by 2029, the government assessed the extent to which these measures had provoked hostility among the unions. On July 21, three national unions refused to attend the consultation organized by Labor Minister Astrid Panosyan-Bouvet. Those who did attend, including the more moderate CFDT and CFTC, expressed outrage upon learning the main details of the government's proposed unemployment insurance reform.
There will be a further tightening of eligibility requirements for benefits, a new reduction in the duration of payments, and stricter rules for mutual contract termination agreements. This is the third round of cutbacks in five years and is intended to generate between €3 billion and €4 billion in annual savings. However, it appears to be a step too far. No serious impact study has been conducted to assess the effects of previous reforms on employment, even though the government points to 450,000 unfilled jobs. In an already bleak economic climate, the risk of increased insecurity and poverty is high.
Pressed by the need to act quickly and decisively, Bayrou's government is tempted to rely on polls rather than unions to adjust the key measures of its plan before the fall. The government is well aware of how difficult it is for the unions to organize significant protests in defense of the unemployed. It also sees how much the issue of welfare abuse, promoted by the far right and the right, is gaining traction. According to an Elabe poll for broadcaster BFM-TV conducted one day after the prime minister's announcement, 82% of French people supported his decision to strengthen controls on long-term sick leave. In contrast, the proposed deletion of two public holidays is proving to be very unpopular.
Long-term reforms are needed
This wouldn't be the first instance of governing without input from the unions under President Emmanuel Macron. However, the greater the tension with the unions, the greater the risk of a no-confidence vote from the left this autumn. In recent months, Bayrou tried to bring the CFDT and reform-minded unions back into the fold through a series of meetings labeled as a "conclave on pension reform." However, that momentum has now been broken.
The scale of the adjustments required to reduce the public deficit from 5.4% of GDP in 2025 to 2.8% in 2029 necessitates long-term reforms. The government's proposals are based on the idea of "working more to produce more." These proposals will not succeed if social partners involved in the running of businesses are not encouraged to reach a consensus, if people feel that they are always the ones paying the price and if issues of job attractiveness and pay are not addressed simultaneously.
Compared with their European neighbors, companies in France are slower to integrate young people into the workforce and quicker to push out older employees. Increasing the volume of work by acting on these two factors seems to be the most viable approach, but it requires everyone to play their part, including employers. Yet, all too often, employers shift responsibility by citing fierce international competition or the high cost of labor. For this approach to succeed, the government must firmly remind employers that they are essential partners in the social contract.