Catastrophic debt, unemployment predicted for France due to Covid-19
France's unemployment insurance agency says its expenses for 2020 are expected to increase by 43 percent by the end of the year, with thousands more people adding their names to the jobless list due to the economic crisis brought on by the coronavirus.
Unédic's expenses could increase by 17.7 billion euros in 2020, while earnings from social contributions paid by companies will have gone down by 16 percent compared to 2019, to around 33 billion.
Unédic says it has forecast the loss of some 900,000 jobs in France by the end of the year which corresponds to an extra 630,000 people on the unemployment benefits payroll.
In a statement released on Thursday, Unédic forecast its deficit to reach 25.7 billion euros by the end of the year, taking into consideration the economic context defined by the Covid-19 crisis.
It attributed the debt of 63.1 billion to the government's partial unemployment mechanism, whereby the government subsidised salaries during the Covid-19 lockdown.
Unédic is funding a third of the partial unemployment mechanism, the rest is financed by the state.
Major debt increase
The debt had already gone from 36.8 billion euros at the end of 2019 to 42.6 billion euros by 23 April, at the height of the lockdown period, in place since mid-March.
In 2020, the expenses for unemployment are expected to reach an estimated 59 billion overall, an increase of 43 percent compared to 2019.
The CGT union says the 900,000 job losses across the country is "catastrophic".
It said this would lead to a double risk – more unemployment coupled with the pressure to modify social advantages in exchange for lowering the debt.
In the first quarter, according to the national statistics agency Insee, 497,000 jobs were lost in the private sector, most of it in temporary work contracts during the lockdown period.