FILE PHOTO: French Prime Minister Michel Barnier speaks during the questions to the government session at the National Assembly in Paris, France, November 19, 2024. REUTERS/Kevin Coombs/File Photo
PARIS (Reuters) - France's national budget is so strained that lawmakers are pushing a proposal to make the French work an extra seven hours each year without pay - the equivalent of one working day - to generate extra funds for state coffers.
The measure, which was approved in the Senate upper house of parliament on Wednesday but which could still be thrown out of the final budget bill, would yield an extra 2.5 billion euros ($2.63 billion) in revenues from additional labour charges.
It comes as Prime Minister Michel Barnier's fragile ruling coalition seeks to pass a 2025 budget through a starkly divided parliament, with Marine Le Pen's far-right National Rally (RN) threatening to topple the government with a no-confidence vote.
The amendment, proposed by centre-right Senator Elisabeth Doineau, would make people work an extra seven hours at some point over the course of the year, for which they would not be paid salary but for which their employers would have to make additional social security contributions.
An earlier idea, which would have had the same effect on the budget, was based around scrapping one of France's official public holidays and making people work on that day. However there was no agreement on which holiday to eliminate.
France already scrapped Pentecost Monday's status as a public holiday in 2005 to help better fund healthcare. While France is famed for introducing the 35-hour work week in 2000, in fact the French work an average of around 36 hours a week, longer than many of their western European peers.
COMPANIES CONCERNED
After spending spiralled out of control this year and tax income fell short of expectations, Barnier's government has proposed 60 billion euros in savings in its 2025 budget through spending cuts and tax increase.
Though the government has targeted the bulk of its tax hikes on the wealthy and big companies, its budget bill includes plans to rein in a tax incentive on employers' social security contributions for low-income workers.
The measure was intended to raise 4 billion euros, though the government has since opened the door to a lower number if lawmakers come up with an alternative to make up the difference.
Nonetheless, companies are already up in arms that the reduced tax incentive would raise their cost of labour, which is already among the highest in Europe largely because of hefty social security contributions.
Julien Crepin, the head of corporate cleaning firm Bio Propre near Paris, said that any increase in labour costs would threaten his business model and force him to raise prices, potentially leading to layoffs.
"We've got small margins in our business. So an earthquake like that would knock us out," he told Reuters, adding it would be much preferable to get rid of a holiday.
Even Barnier's own finance minister, Antoine Armand, is critical of reducing the tax incentive, saying that the French generally needed to work longer.
"An hour longer worked is an hour more of social security contributions," he told Le Parisien newspaper on Wednesday.
($1 = 0.9508 euros)
(Reporting by Leigh Thomas; Editing by Mark John and Alison Williams)
