June 13, 2018 / 7:03 PM / in 11 days

French jobless benefits fund sees break-even in reach in 2020

PARIS (Reuters) - The French jobless benefit fund said on Wednesday its accounts were returning to positive territory faster than expected thanks to falling unemployment.

FILE PHOTO: People walk on the esplanade of La Defense, in the financial and business district, west of Paris, France, October 6, 2017. REUTERS/Charles Platiau/File Photo

The state-guaranteed Unedic, which is jointly managed by employers and unions, said it now expected to be able to bring its accounts back into the black for the first time since 2008 in 2020.

It said in a quarterly outlook it expected the shortfall between what it pays out and what it brings in to stand at 1.4 billion euros ($1.65 billion) this year versus 2.0 billion previously.

It expects to post a deficit of 100 million euros next year before turning in a surplus of 1.6 billion in 2020 and 3.6 billion in 2021.

Unedic said unemployment was expected to fall faster than previously expected, which means it will have to pay out less in benefits than previously anticipated.

It said a deal between employers and unions last year on contributions to the fund was also helping by generating savings of 930 million euros a year.

Unedic is financed directly by contributions from workers and employers, with any shortfalls made up by borrowing. Because the state guarantees Unedic’s bonds, its debt counts toward the total government debt.

Unedic’s debt, which stood at 33.5 billion euros last year, was expected to peak at 35 billion euros in 2019.

Reporting by Yann Le Guernigou; Writing by Leigh Thomas; Editing by Alison Williams

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