French PM vows to reform benefits, reduce deficit and test four-day week

French Prime Minister Gabriel Attal has unveiled plans to overhaul unemployment benefits, while promising to reduce France's spiralling deficit. The government will also test out a four-day working week.

Speaking Wednesday on TF1 television, Gabriel Attal announced the need for a reform of unemployment payments to make up for the deficit that spiralled out of control last year.

The 35-year-old prime minister said he had asked Labour Minister Catherine Vautrin to prepare "new negotiations" with social partners on unemployment insurance, proposing to reduce the length of payments to 12 months from 18.

The proposal was immediately slammed as "unacceptable" by France's powerful trade unions.

Attal was speaking after having convened a government seminar at his Matignon office devoted to the French workforce. 

A new unemployment insurance agreement – negotiated last autumn by the unions and employers' organisations – is due to be validated by the government.

This means Attal's idea of going back to the drawing board has sent the opposition into a frenzy, starting with the far-right's Marine Le Pen. 

National Rally deputies denounced what they call "a swindle that has only one aim: to pick the pockets of the French in order to bail out the state's accounts, which are in deficit because of the government's incompetence". 

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Fears of fiscal 'downgrade'

This comes as the French government looks for savings after the public deficit slipped to 5.5 percent of GDP in 2023 – according to INSEE figures released earlier this week. This amounts to €15.8 billion more than the government had forecast.

Attal's cabinet has ruled out raising taxes to make up for the shortfall. 

Although €10 billion in cuts have already been agreed upon for the 2024 budget, Finance Minister Bruno Le Maire has warned that additional savings will have to be found from this year onwards, and "at least 20 billion" for 2025.

Attal reaffirmed on Wednesday that his government's objective is "to bring deficit below 3 percent by 2027".

Similarly, the government is looking for positive signals to send to financial agencies, which could downgrade France's credit rating following the example of Moody's, which considers France's budget path to be "improbable".

Unions fight back

A new reform of unemployment insurance, from which the government hopes to extract "a few billion", would be added to those contested by the unions in 2019 and 2023. 

"The only thing announced by Gabriel Attal this evening is yet another attack on precarious [workers] or unemployed", said Denis Gravouil, the CGT's negotiator on unemployment insurance.

CFDT secretary general Marylise Léon said: "The unemployment insurance scheme cannot be a budgetary adjustment variable for the state".

François Hommeril, president of the CFE-CGC, denounced what he called a "populist discourse" that ignores the situation of an unemployed person faced with the difficulty of finding a job.

Despite the opposition from trade unions, the country is unlikely to see the sort of mass protests that were organised during the government's pension reform.

Testing a four-day week

When asked about the evolution of a four-day working week, Attal said he was not in favour of reducing working hours.

"We need to get out of this straitjacket of 35-hours a week, where we clock-in and clock-out ... to give more flexibility to those who want it," he told TF1. 

Trials are due to be carried out later this year.
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