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The unemployment insurance deficit is exploding ... but less than expected

2020-10-21T17:16:08.621Z


At the end of 2020, Unédic expects the plan's annual deficit to climb to € 18.7 billion. That is 7 billion euros less than the figures put forward in June.


The picture is bleak, but less than expected ... With the massive deployment of short-time working and the unprecedented explosion in the number of job seekers in recent months, the finances of the unemployment insurance scheme will plunge well in 2020 The Unédic, which published its new financial forecasts this Wednesday afternoon, expects the annual deficit of the regime to be around 18.7 billion euros at the end of the year.

Read also: Unemployment, a key indicator for 2022

A disastrous figure which erases the ambitions of a return to equilibrium in the short term and which smashes the records of the years 2015-2016 which were around 5 billion euros in deficit.

However, the forecasts presented this Thursday are better than those put forward in mid-June.

At the start of the summer, the joint organization expected to see the cash balance of unemployment insurance show a loss of 25.7 billion euros.

By reviewing its copy, Unédic therefore notes an improvement of 7 billion euros.

“The third quarter was more favorable than expected.

The economic rebound was stronger, short-contract recruitments greater and partial activity less mobilized.

On the other hand, we expect a fourth quarter worse than expected ”

explains the managing director of Unédic, Christophe Valentie, who expects the destruction of 670,000 salaried jobs at the end of 2020 and additional compensation for 420,000 people compared to 2019. Debt, it will inexorably widen in 2020 and could reach 55.5 billion euros.

This increase would be linked for 57% to the partial activity, of which Unédic finances a third and which was deployed for nearly 9 million people at the height of the crisis, for 28% to the increase in expenditure of unemployment benefits and for 15% to postponements of contributions and other lower resources linked to the fall in employment.

But again, the forecasts are better than those of June which showed a debt of 63.1 billion euros.

Debt reaching 65.2 billion euros expected for 2021

In detail, the expenditure of the regime should be around 54.2 billion euros and thus increase by 32% compared to 2019. On the other hand, revenues will show a decrease of 10% to reach 35, 5 billion euros.

Unemployment insurance is indeed

"four times more impacted by a crisis"

than other social protection schemes,

"which are only affected on the revenue side"

, recalls Unédic.

For example, the net expenditure of short-time working is estimated at 8.3 billion euros and the drop in revenue for this same device amounts to 1.9 billion euros.

This brings the cost of this tool for maintaining employment to 10.2 billion euros for Unédic's finances.

Even if this seems premature in view of the climate of health uncertainty that reigns, Unédic has also planned for the year 2021. The partner organization expects a deficit of 9.7 billion euros and a debt which therefore amounted to 65.2 billion euros.

A forecast which is based on the application of the unemployment insurance reform on January 1, 2021 with the parameters that were decreed in July 2019. Either without any modification of the configuration ... In addition, longer-term financing the unemployment insurance scheme, as well as its governance, must be discussed from the end of the year between the social partners and the government.

Source: lefigaro

All business articles on 2020-10-21

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