France’s unemployment insurance system is facing a projected deficit of €2.1 billion in 2026, according to financial forecasts released Tuesday by the Unédic, the organization responsible for managing the system. The Unédic is urging the state to halt its current practice of drawing funds from the insurance scheme.
The projected shortfall comes as the system is also preparing to begin repaying debt accumulated during the COVID-19 pandemic. Unédic officials estimate the total debt, including COVID-related obligations, will reach €61.5 billion by the end of 2026. Patricia Ferrand, president of Unédic, emphasized the urgency of the situation, stating the organization needs “cessation of state levies.”
Despite a currently stable labor market, with approximately 2.6 million individuals receiving unemployment benefits, Unédic anticipates this number will remain relatively consistent throughout 2026 and 2027, before a slight decrease to 2.5 million in 2028. This stability is attributed to the effects of reforms to unemployment insurance implemented since 2021, which have reduced benefit levels for job seekers.
Unédic forecasts show expenses rising from €45.3 billion in 2025 to €46.3 billion in 2026 and €46.6 billion in 2027, before falling back to €46.2 billion in 2028. These projections are based on an anticipated economic growth rate of 1% in 2026, increasing slightly to 1.1% in 2027, and 1.2% in 2028. However, Unédic cautioned that this growth trajectory “must be considered with caution due to various uncertainties, related in particular to the political and geopolitical situation.”
A significant contributor to the 2026 deficit is a planned €4.1 billion levy by the state, which Unédic officials say would have resulted in a positive balance of €2 billion without the withdrawal. In total, state levies on Unédic revenues between 2023 and 2026, taken in the form of reduced employer contribution offsets, amount to €12 billion. Jean-Eudes Tesson, vice-president of Unédic, stated that “all recent measures that do not correspond to the initial purpose of Unédic must be prohibited.”
The financial strain is further compounded by the commencement of repayments on the COVID debt and increased contributions to France Travail, exceeding €5 billion for the first time. Reduced revenues linked to reforms of the independent worker self-employment social contribution (CSG) are impacting the system’s finances. Unédic is being forced to borrow at higher rates on financial markets to manage these repayments, with debt servicing costs expected to represent 1.7% of Unédic revenues in 2028, compared to less than 1% until 2022.
Lara Muller, Unédic’s director of studies, explained that if state levies are discontinued, revenues should return to approximately 1.6% of gross domestic product (GDP), while expenditures are expected to fall to between 1.45% and 1.4% of GDP. The impact of a recently concluded agreement to reduce unemployment benefits for workers who accept voluntary severance packages is not yet reflected in these forecasts.
