Less than one month after the start of lockdowns in many EU countries due to COVID-19 outbreak, the number of additional unemployed workers has crossed 4 million, with hundreds of thousands of companies closed and many unlikely to survive the emergency.
At the same time, measures to support companies facing difficulties and to provide workers suspended from work with short-time work arrangements and income compensation have been put in place in most Member States, making it possible to save millions of jobs.
However, the initiatives for financial support announced by the European Commission and the ECB at the beginning of the lockdown were poorly implemented and did not reach national economies and public budgets.
For these reasons, the ETUC urges Finance Ministers and EU leaders to swiftly approve and implement all the new extraordinary measures proposed by the President of the Eurogroup. ETUC proposes further important recommendations to be taken on board.
The implementation of SURE has to be delivered by recommending Member States to:
- Establish short-time work schemes and similar measures in all countries;
- Ensure that such measures cover all workers, including non-standard and self-employed, and all sectors and companies, including SMEs;
- Provide financing for such measures only to employers that do not lay off workers;
- Design and implement the measures through social dialogue.
The activation of the ESM for the COVID-19 emergency:
- Should become open also for non-Euro area Member States;
- Has to prioritise support to health care systems and other social protection systems;
- Must not imply any macro-economic conditionalities or structural reforms imposed on Member States;
- The regulations on the use of the ESM have to be adapted accordingly.
The activation of EIB funding for the COVID-19 emergency:
- Has to give priority to SMEs, but also to pubic services (particularly health care) and social infrastructures;
- Must not include any macroeconomic conditionalities;
- Guarantees and loans should be accessible to SME without administrative or other costs.
For all the three measures:
- The size of funding foreseen (200 billion euros for each ESM and EIB, 100 billion euros for SURE) must be re-evaluated as soon as additional funding proves to be necessary;
- Activation must be immediate;
- The loans to Member States must be with long-term repayment and with zero- or negative interest rates.
While these measures can be effective to tackle the current emergency if implemented in accordance with to the recommendations above, they are going to increase Member States’ debt and will not be enough to support recovery after the emergency.
In this respect, only an Extraordinary Recovery Plan can create the conditions for medium and long term sustainable and inclusive growth in Europe.
Such a Plan, which the European Council has already mandated the European Commission to design, should include:
- A quick decision about its activation and implementation;
- A common debt instrument to issue bonds at EU level and new EU taxes, to provide adequate financing to Member States and to increase the own resources of the European Union;
- A swift approval of the Multiannual Financial Framework for the next 7-years period without further delay, which should be significantly increased through the above-mentioned instruments to top up EU own resources;
- The adoption of a sustainable and inclusive growth model for the EU, based on the initiatives already launched by the European Commission – including the Green Deal, the Action Plan for the implementation of the European Pillar of Social Rights, the Fair Minimum Wages initiative, the Pay Transparency initiative, a new industrial policy strategy for the EU and the Digital Pact – and a concrete roadmap for the implementation in the EU of the Sustainable Development Goals of the Agenda 2030 of the United Nations.
The European Union is facing an unprecedented emergency. Only if we will be all able to put in place all necessary measures now, will it be possible to prevent a new and dramatic economic and social crisis from happening.
The European project and our democracies are at risk, there is a desperate need for responsibility and solidarity to show to the EU citizens and working people that we can build together a Europe that protects them.