ETUC Assessment of the Annual Sustainable Growth Strategy 2021

    Adopted at the virtual Executive Committee Meeting of 28-29 October 2020

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    A QUICK ANALYSIS OF CHALLENGES OVERLOOKED IN THE ASGS 2021 The ASGS 2021 sets guidelines for the implementation of the Recovery and Resilience Facility (see also ETUC’s position on the Recovery Plan). If, on one hand, it is a step toward a quick activation of resources for investments, on the other hand, the ASGS falls short of any socio-economic analysis of the COVID-19 crisis and overlooks the necessity to urgently coordinate measures to protect workers, wages and households’ income in the present situation.

    In the EU, sovereign debt levels are increasing while GDP losses are now estimated in a range between 8 and 10% in Europe (between 4 and 5% globally). According to international institutions, GDP projections for the next 3 years now lags below the baseline if there was no pandemic. Public deficit in the EU and Euro area has increased in order to finance measures adopted due to COVD-19. It allowed to keep the economy alive and offered shelter to people mostly affected by the crisis. Member states are supposed to run even higher deficits as the second wave of contagion is spreading and the impact of the first wave is showing its consequences on employment and poverty.

    The GDP of the EU will surely rebound but it will take time to go back to the level of 2019. GDP losses are more significant in countries that depend on industries such as tourism, culture, retail, public transport, steel, automotive and aviation. Sectors that have certain characteristics will continue to suffer (front desk services, services with close contact between people, activities strongly depending on international trade and movement of people). Telework will also imply a challenge for businesses that were providing services to mobile workers and to offices. Finally, experience shows that countries with less inclusive and more fragmented labour markets will go through prolonged economic stagnation.

    Quarterly data of Eurostat shows that employment indicators move slower compared to GSP and other shock indicators. However, the marginal increases on a quarterly basis (as at June 2021) in the data referring to involuntary non-work periods among workers are unprecedented and are a sign that, unfortunately, confirms what the ETUC claimed to be the effect of the crisis on 45 million workers. It is urgent that the EU Member States continues to work in solidarity, acting in a coordinated manner, prolonging and refinancing SURE (see also ETUC inputs for the Joint Employment Report). ETUC affirms that national and EU emergency measures, particularly those connected to employment protection and income support, must continue until the full recovery of the economy and the stabilisation of jobs.

    Resources must be ensured by government expenditure maintaining the General Escape Clause of the SGP while ensuring unconventional monetary policies and low interest rates from the ECB remain in place. In this context, a European minimum income scheme is urgent. It should include European binding standards and a solidarity mechanism, based on the model of SURE. We need a quick adoption of all the legal acts required to operationalise the Recovery Plan for Europe. ETUC rejects any attempt to force future decisions to backtrack on the rule of law or the social ambitions of the Recovery plan.

    The ASGS did not assess the impact the massive wave of restructuring currently taking place across Europe will have on the European economy. The European Solvency Support Funding needs to be restored to offer support in cases of restructuring. Member States and the European Commission must have a crucial role in supporting companies to and guaranteeing them resources to keep running their businesses. However, employers must guarantee reciprocity; they need to take responsibility and exhaust all possible measures (early retirement schemes, freeze of payment of dividends, reduction of working time, STW or similar, sharing or workers in the same company) until they start restructuring and layoffs. In this way company engage for a higher social return. These challenges and relative policy responses do not appear in the ASGS creating vulnerability in the capacity of the EU to offer an immediate and coordinated response to the socio-economic consequences of the pandemic crisis.

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    With the financial support of the European Commission DG Employment

    © ETUC 2018 - European Trade Union Confederation / EU