EU turns to active labour market policies to beef up job recovery

The European Commission wants member states to adopt measures to support workers’ hiring and retraining in the aftermath of the pandemic, as the green and digital transitions will shake up a European job market already in pain because of COVID-19.

Europe is in the midst of a twin transition, officials repeat. National economies want to become ‘greener’ and more digital this decade. But there is a third and more complicated transition ongoing, as the bloc is trying to overcome the biggest recession in three generations and offset the job losses caused by the virus.

The massive response by the capitals, and backed by the EU’s SURE mechanism to support workers, helped to protect 32 million jobs in the Union, via short-time work schemes and temporary furloughs.

But as the health crisis starts to recede in Europe and the economic response becomes more calibrated, the Commission wants member states to change the focus from protecting jobs to helping workers to complete the transition to the post-covid economy.

“We need to strengthen our active labour market policies”, the Commissioner for Employment, Nicholas Schmit, said on 3 June.

These type of policies will fit better with the transformation ongoing in many companies across Europe, pushed by the new sustainability priorities and a world of work transformed by automation and artificial intelligence.

Schmit said temporary subsidies for hiring workers, reskilling and upskilling and successful management of active labour market policies will be more essential than ever “to make the recovery a success”.

Before the crisis hit, the EU labour market had ended its sixth year of expansion, with more than 209 million people in employment and an unemployment rate of 6.5% in the fourth quarter of 2019.

One year later, employment had dropped by three million, and the unemployment rate rose to 7.3% in April. Between the fourth quarter of 2019 and the second quarter of 2020, the EU job rate registered the sharpest decline observed over two successive quarters.

But optimism is not only back in the European outlook, national governments are also aiming for ambitious targets for this decade.

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