42 million EU workers on paid leave amid pandemic

By   |  Published: 16th May 2020  5:15 pmUpdated: 16th May 2020  4:02 pm

Brussels: Some 42 million European Union (EU) workers have been affected by temporary layoffs due to the coronavirus pandemic.

The sudden paralysis economies have been plunged into as a result of containment measures to halt the spread of COVID-19 has pushed EU member states to resort to temporary layoffs, furloughs and wage cuts with governments footing the bill in a bid to save economiesm reports Efe news.

By early May, 26 per cent of the EU’s 160 million workers had been enlisted for short-time work or similar forms of temporary wage subsidies, setting a record not even reached during the 2008 financial crisis, according to the European Trade Union Institute (ETUI).

France is the country where the schemes are most widespread with 48 per cent of the workforce affected (11 million workers), followed by Italy with 47 per cent (8 million), Germany with 27 per cent ( 10 million), Spain with 24 per cent (4 million) and the Netherlands with 23 per cent (1.7 million).

In Portugal, the Czech Republic, Finland, Bulgaria, Poland and Slovakia, temporary layoffs have been issued to under 5 per cent of the workforce, according to the report.

ETUI said the employment schemes have been an effective measure to prevent layoffs in the short term and a sudden spike in unemployment rates as has happened in the US where the pandemic has left 33 million people out of work.

General Secretary Luca Visentini said that compared to the 42 million workers with short term work or temporary wage subsidies, there are between 10 and 15 million people who are at risk of losing their jobs due to a lack of access to these schemes.

The schemes are not foolproof either, and Visenti warned there were vacuums in their implementation and payment delays.

“In many countries aid has not yet reached the people. In Italy, there are supposed to be 12 million people with a temporary layoff, but half of them have had no wages for two months,” he told Efe on Saturday.

In many countries, the self-employed, temporary and migrant workers are not covered by these programs and for those who are receiving wage subsidies, the aid does not even cover 80 percent of normal salaries, which ETUI suggest should be the minimum payment.

State wage subsidies range from covering 100 percent of salaries in the Netherlands and Denmark to 50 per cent in Poland. Most governments are covering the cost of between 70 per cent of wages (Spain, France and Belgium) to 80 per cent (Italy, Germany and the UK).

To the myriad domestic problems member states face, the delay of the implementation of a new instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE) poses further risks to economies.

The mechanism will deploy financial assistance up to 100 billion euros as loans so EU member states can cover the costs of temporary employment schemes during the pandemic.

SURE still needs to be given the final go-ahead, and unions fear the funds won’t become available until fall.