Jobless protesters occupy dole office

Jobless protesters occupied a dole office in the Paris suburbs yesterday and others demonstrated in the capital against the axeing of unemployment pay for about 200,000 people as from tomorrow.

Jobless protesters occupied a dole office in the Paris suburbs yesterday and others demonstrated in the capital against the axeing of unemployment pay for about 200,000 people as from tomorrow.

In an attempt to rescue the unemployment insurance system from bankruptcy, the maximum period of wage-linked, dole payments will be cut from 30 months to two years in the new year.

At least 180,000 people, and perhaps 250,000, are expected to find their payments cut off tomorrow. Two thirds will be eligible for other forms of welfare but up to 60,000 people could lose all right to such payments.

A group of job-seekers who invaded an unemployment assurance office in Villejuif, south of Paris were eventually ejected by the police. There were also demonstrations close to the Prime Minister's office and the Ministry of Social Affairs in central Paris.

The reform of the supposedly self-financing, unemployment insurance system - Unedic - was agreed by employers and moderate trade union federations a year ago in an attempt to reduce a €3.7bn (£2.6bn) deficit, which threatened to reach €15bn by the end of 2005. More militant trade unions refused to agree the reforms and called again for negotiations.

The dispute is one of a row of political powder-kegs that face the centre-right government of Jean-Pierre Raffarin in the new year as it attempts to cut the deficit in public spending and reform the welfare system. The government is also committed to changing the system of public health insurance, which will be at least €10bn in the red next year.

The unemployment and health insurance systems are nominally financed by workers' and employers' contributions and managed, independently of the state, by union and employers' representatives. The jobless fund, Unedic, has been forced deep into the red by the resurgence of unemployment (once again approaching 10 per cent) and by persistentunemployment in heavy industries.

Business, moderate unions and the government say the reforms - which include increased payments by workers and employers - are essential to rescue the system from collapse. Other unions and pressure groups say the cuts will fall hardest on unemployed people who are over 50 and have no prospect of finding jobs.