PARIS (Reuters) - The French government is looking to impose tighter checks on the unemployed to ensure they are seeking work, an attempt to limit spending on benefits and cut joblessness that has split ruling Socialists and infuriated trade unions.
Socialist Prime Minister Manuel Valls set off the outcry this week by suggesting more needed to be done to encourage the unemployed back into work. A survey in job centers had shown that up to 20 percent of job seekers were not actively seeking work as they are required to do under job center statutes.
Unions, managers and the state - which co-manage the UNEDIC jobless fund - will discuss its findings and decide before the end of 2014 whether job centers need to hire special monitors to police job-seekers’ efforts, a source close to the talks said.
Economists say such a move could incite more long-term unemployed to return to the job market and help the deeply indebted UNEDIC, whose total debt is expected to reach 21.3 billion euros this year, to shore up its finances.
France’s unemployment rate is stuck above 10 percent despite billions of euros spent on subsidized jobs and the country is under pressure to show it can conduct reforms. Germany and Sweden both registered falls in unemployment after toughening conditions for jobless benefits in the 1990s and 2000s.
But Valls’ call drew widespread criticism from unions and members of his own party. President Francois Hollande, when questioned about the prime minister’s statement, said jobseeker controls were “not a timely issue”.
Until now there has been no suggestion that any tighter checks would be accompanied by stiffer penalties for those who fail to seek work.
But unions protested that the government was unfairly using the unemployed as scapegoats for unsuccessful economic policy.
“What’s happening nowadays, with people pointing to the unemployed as problematic, is dangerous,” Laurent Berger, head of the CFDT union, told le Parisien newspaper, while CGT union leader Thierry Lepaon called Valls’ statement a “provocation”.
Dominique Barbet, European economist at BNP Paribas, said the measures currently under discussion in France were a far cry from the “Hartz 4” reforms which cut jobless benefits and are credited with relaunching Germany’s economy last decade. Critics say the downside has been more Germans falling into poverty.
Hollande has already ruled out lowering total payouts for jobseekers, which can last for 2 years at 67 percent of their previous salary.
“If they were discussing the amount of payouts, then we would have something more similar to the Hartz 4 reforms in Germany,” said Dominique Barbet, European economist at BNP Paribas. “For the time being, they are moving ahead with baby steps, trying to avoid fraud.”
The source said that several job centers had been equipped with special monitors to make sure the unemployed were seeking jobs as part of an “experiment”, because current monitors are overwhelmed in their role as employment advisers.
The conclusions of the investigation will be discussed in a meeting of UNEDIC’s stakeholders on Wednesday.
Reporting By Nicholas Vinocur; editing by Mark John