New Delhi

French Prime Minister Gabriel Attal has announced significant cuts to France's unemployment benefits to support President Emmanuel Macron’s economic reform agenda.

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The proposed changes, detailed by Attal in an interview with La Tribune, include reducing the maximum duration of jobless benefits from 18 months to 15 months.

Additionally, the period required for work to qualify for these benefits will be extended.

The government plans to implement these changes by December 1.

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Prime Minister Attal noted that the reform is not primarily a cost-cutting measure but is designed to increase employment and thereby sustain the benefits system through higher workforce participation.

An adviser to Attal projected that these changes could save up to €3.6 billion ($3.9 billion) annually and increase the workforce by 90,000 individuals.

Furthermore, the reforms will redefine the age at which workers are considered "senior," lowering it to 57 years, allowing them to qualify for improved, albeit less generous, benefits.

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This adjustment aims to balance the benefits provided to older workers with the need to encourage longer participation in the labour market.

These measures follow a stern warning from the International Monetary Fund regarding France's escalating debt and a call for stronger efforts to control budget deficits.

The French fiscal watchdog has also criticised current plans, labelling them as lacking in credibility and coherence.

French Finance Minister Bruno Le Maire reaffirmed that the government would continue to make efforts towards reducing the budget deficit, pledging to meet the European Union's deficit limit of 3 per cent of GDP by 2027.

This fiscal responsibility is seen as crucial in maintaining economic stability and credibility within the EU.

The timing of these announcements is particularly noteworthy, coming just two weeks before the European Parliament elections.

Polls suggest a possible victory for Marine Le Pen’s far-right National Rally party, which has vocally opposed Macron’s labour reforms, arguing that they unfairly disadvantage workers.

(With inputs from Bloomberg)