Issued on: 17/04/2020 – 11:05Modified: 17/04/2020 – 11:05
Almost nine million workers in France are currently on a temporary unemployment scheme designed to avoid mass redundancies, the French finance minister told lawmakers on Friday as companies struggle to stay afloat during the coronavirus pandemic.
As Covid-19 hit France, the government quickly introduced a system whereby companies can temporarily put staff on reduced or no hours while the state picks up all or most of their net wages for unworked time.
“We refused, both politically and economically, to allow mass redundancies,” Finance Minister Bruno Le Maire told French lawmakers on Friday, describing the costly scheme as an “investment”.
The mechanism, designed to avoid a flood of layoffs and swamping unemployment offices for benefits, is one of the most expensive parts of the government’s €110 billion coronavirus rescue package, accounting for a fifth of the total.
On Thursday, Labour Minister Muriel Penicaud said 732,000 firms had made use of the mechanism for 8.7 million workers. Meanwhile, requests for traditional unemployment benefits have also climbed, but the increase is now in the single digits.
Penicaud has asked the country’s biggest companies not to take advantage of the already costly scheme, which is mainly designed to help smaller firms stave off bankruptcy.
Amazon taps scheme
The government currently expects its public sector deficit to rise to 9% of gross domestic product this year, up from 3% in 2019.
The closure of non-essential retail businesses has hit that sector hard, while many manufacturers have halted or reduced production to take into account health measures to slow the spread of Covid-19.
On Thursday, Amazon became the latest company to say it will tap the temporary unemployment scheme to pay its employees at its six French warehouses, claiming a court ruling had left it with no choice but to suspend all activity there.
Earlier in the week, a court near Paris ruled that the US e-commerce giant had to carry out a more thorough assessment of the risk of coronavirus contagion at its warehouses and should restrict its deliveries to essential goods in the meantime, or face a fine.
(FRANCE 24 with REUTERS)