Europe's employment aid keeps jobs from vanishing — for now
PARIS — Christian Etchebest's Parisian bistro is a shadow of its usual bustling self. Five lunch specials sit in neat paper bags on the bar awaiting takeout customers — a tiny fraction of his normal midday business before the coronavirus.
A skeleton staff rotates in daily at La Cantine du Troquet near the banks of the Seine River, just blocks from the Eiffel Tower. One day they packaged a streamlined version of his Basque menu: sausages with a celery and beetroot remoulade, mashed potatoes and a dessert of strawberries with lemon sauce.
Yet Etchebest isn't facing bankruptcy — not yet anyway — thanks to a French government program that lets him put staff on reduced hours and makes up most of their lost salary, on the condition they are not fired. That is giving him a chance to keep his team together, awaiting the day when restrictions are lifted and sit-down meals are again allowed at this restaurant and his six others across Paris.
Similar programs are keeping hard-hit businesses across Europe afloat, preventing millions of workers from losing their jobs and income for now, and thousands of bosses from seeing their trained staff scatter. Some 11.3 million workers
in France are getting up to 84% of net salary. The government estimates the cost at 24 billion euros ($26 billion), with half of all private sector employees expected to take part.
In Germany, some 3 million workers are being supported, with the government paying up to 60% of their net salary if they are temporarily put on shorter or zero hours. Those with children get 67%, and many companies such as Volkswagen add more.
The impact of the pandemic and the cushioning provided by such short-work programs were underlined in reports released Thursday that showed the unemployment rate in the 19-country
eurozone edged up only by a tenth of a point to 7.4% in March despite a record economic contraction. GDP tanked 3.8% quarter- onquarter in the first three months of the year and is forecast to slide even more in the second quarter.
The work support programs are different from jobless benefits. They are only for temporary shutdowns that are no fault of the business itself. And they are no panacea. Such programs can't save jobs that disappear due to long-term slowdowns in customer demand or to technological changes. But it gives workers and bosses breathing space and hope, preventing the unnecessary destruction of viable businesses.