Unemployment insurance, deficit: Attal tries to put out the fire that smolders in the majority

The Prime Minister announced the establishment of a mission in this direction before the Renaissance group in the National Assembly, according to comments reported by Matignon, while the opportunity to increase taxes to restore public finances divides the presidential camp.

"We are going to resolve this debate together, because we must not suffer, but we must be on the offensive" to "move forward in a coordinated, coherent manner", explained the head of government, hoping that "the entire majority will be involved " to this work and that each component "report (its) proposals" to Jean-René Cazeneuve, Budget Rapporteur, who will lead the mission.

Gabriel Attal had already opened the door last week to this idea of ​​taxation. He had affirmed on TF1 that he "never (have) had a dogma on the subject" of superprofits, recalling that energy companies and biology laboratories had already been subject to a specific tax. The head of government had refused to touch two “red lines”: the middle classes and businesses.

The president of the MoDem group Jean-Paul Mattei had already proposed, in vain, to increase the rate of the flat tax on wealth income, a measure which would target the wealthiest taxpayers.

"To assume"

For Gabriel Attal, it is above all a question of responding to the concerns of the majority, whose left wing is very angry against the new reform of unemployment insurance which could reduce the duration of compensation for job seekers.

The Prime Minister reiterated "assuming" such a reform "to build a stronger country", while the same morning, the President of the National Assembly Yaël Braun-Pivet expressed reservations, recommending first to "evaluate" the effects produced by the previous reforms of 2019, 2022 and 2023.

Reducing the duration of compensation is "not the right way", "even though we see that unemployment is no longer falling", also judged on Sunday the president of the Law Committee of the Assembly Sacha Houlié. He recalled that the government has already put in place a "countercyclicality" measure, that is to say that the compensation conditions tighten when unemployment falls, and relax when it increases.

“When I hear you say that we should not reform because unemployment is stagnating, I do not agree,” Gabriel Attal replied on Tuesday. “This reform is not an economic reform, but a reform of productivity and prosperity,” he argued. “We want to finance public services and nursing homes. What we don’t want is to have to further increase the medical franchise.”

MP Mathieu Lefèvre, from the right wing of the majority, also defended the "need" for reform "when 340.000 jobs are unfilled".

"Friction"

Jean-Marc Zulesi, left-wing Renaissance MP, suggested for his part to wait "to see what comes out of (the) discussion" of the social partners who manage Unédic, but considered it necessary to have a "signal of the other side, on the taxation of superdividends and the fight against rents.

“This is not the first time that liberal-inspired reforms have created friction among the majority,” said a close friend of Emmanuel Macron. “It’s up to the Prime Minister to ensure that this is understood and accepted.”

But, he insisted, "this is not an accounting approach, it is a broader design: increasing activity allows us to increase revenue and therefore reduce the deficit."

This reform comes at a time when the executive is seeking to make savings everywhere after the unprecedented slippage of the deficit to 5,5% in 2023, which could lead to a possible downgrade of the country's rating.

Gabriel Attal reiterated on Tuesday that he still wanted to bring it back to 3% in 2027 and recalled that the government would give next week "the trajectory" to achieve this objective.

The head of the Republicans Eric Ciotti, who threatens to censure the government for its "catastrophic" management of public finances, wrote to Gabriel Attal to demand an amending budget. And LR deputies will launch a commission of inquiry into the “strong growth in debt” under the presidency of Emmanuel Macron.