French government may follow Viktor Orbán’s policy in the future

In Hungary, one of the main tools on the road to a work-based society since 2010 has been the reduction of unemployment benefits: the “work instead of aid” policy. According to a leaked draft, the French are preparing a similar move. It has sparked a huge outcry from interest groups.

One of Hungarian Prime Minister Viktor Orbán’s main policy objectives, the principle of “work instead of aid”, may also be gaining ground in France, according to a leaked French government draft that has sparked a huge outcry among labour representatives, napi.hu reports.

Under the plan, the French government would reduce or increase the duration of unemployment benefits in proportion to employment, Euractiv reported. The measures are aimed at encouraging French people to work. In France, unemployed people under the age of 53 currently receive benefits for up to 24 months.

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Under the new draft,

• if the unemployment rate falls below 9 percent, the duration of the benefit would be reduced to a maximum of 18 months.
• if unemployment were to fall below 6 percent, benefits would be paid for only 9 months.

Another important tightening of the reform is that benefits would not be paid in the following cases:

• if workers leave their jobs before serving their notice period,
• or refuse to renew a fixed-term contract twice in one year.

According to employers’ associations, more than 90 percent of French SMEs face labour shortages. According to employers’ associations, small firms are not only unable to find good workers, but are almost unable to recruit new staff. French unemployment is among the highest in Europe, significantly higher than in Hungary or the Netherlands. In the third quarter of this year, the rate was around 7 percent, above the EU and eurozone averages.

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Employment is also lower than the EU average, with some room for improvement, especially among the older working-age population. By comparison, the unemployment rate was 3.6 percent in Hungary and 3 percent in Poland and Germany in October, according to Eurostat. The best performer is the Czech Republic, with a jobless rate of 2.1 percent.

The unions reject the proposal to cut benefits. They say this is not the right incentive and that the unemployed are being made scapegoats by the government. One of the biggest left-wing unions, the CGT, also pointed out that although wages rose in nominal terms at the beginning of the year, the real value of French salaries had fallen by more than two percent due to high inflation.

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Source: napi.hu, Euractiv