The French Government is studying extending partial unemployment mechanisms "for one or two years", with the aim of halting mass unemployment and avoiding bankruptcies of companies. This mechanism - the equivalent of the Temporary Employment Regulation File (ERTE) in Spain - allows workers to keep their jobs, while their companies are experiencing economic difficulties due to the coronavirus crisis.

"We are going to put in place a long-term partial activity device where it will not be part-time or part-time, but instead the workers may have a reduction in working hours , which will be partially compensated by the State. This will allow them to keep their Employment. It will be negotiated in the company, "French Labor Minister Muriel Pénicaud explained Monday in statements on FranceInfo radio.

The head of the Employment portfolio said that this device "is intended to last one or two years . " It is expected that, after meeting with unions and employers throughout the week, the Government will specify the details of this long-term French ERTE.

The French Government boasts of having one of the most generous partial unemployment systems in Europe. French partially unemployed workers receive 84 percent of their old net salary paid by the public coffers, up to a limit of 4.5 times the minimum wage, with a minimum of 8.03 euros an hour. Those who receive the minimum wage are paid 100% by the French State to prevent them from losing purchasing power.

8.6 MILLION IN PARTIAL UNEMPLOYMENT

"At the end of April, there were 8.6 million French people in partial unemployment," said the minister, who warned that the French government will tighten controls to fight fraud in companies that have resorted to partial unemployment when they should not have.

"There will be more than 50,000 inspections (of companies) between now and the end of the summer," announced the minister, who warned that employers who have committed fraud may receive serious administrative, financial and criminal penalties for this. Pénicaud gave as an example that there have been fraudulent cases in which "people were teleworking full time and at the same time partially unemployed ." If it is an error, it is corrected. If it is fraud, there will be sactions, "he warned.

The Bank of France estimates that the massive partial unemployment scheme put in place by the Government will serve to curb the impact of the crisis on employment. The unemployment rate, which had dropped to 8.4% in 2019, could rise to 11.7% in mid-2021 before falling below 10% in 2022. It will take until the end of 2022 for it to drop to 9.7%, according to the Bank of France forecasts published on Tuesday.

France's gross domestic product (GDP) will drop 10.3% this year, according to its projections. France would not recover the level of economic activity it had at the end of 2019 until mid-2022.

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