The European Union‘s executive arm on Wednesday proposed a wage-subsidy scheme to encourage employers to cut workers’ hours rather than their jobs amid the coronavirus epidemic, a plan that could be worth 100 billion euros ($109bn) in borrowing, guaranteed by all EU countries.

The proposal might find favour in Italy, Spain, France and other countries which last week demanded a common debt instrument issued by an EU institution to fight the economic downturn.

Faced with strong opposition from Germany, the Netherlands, Finland and Austria, which oppose joint debt issuance, EU leaders asked their finance ministers to come up with workable proposals by next week.

European Commission head Ursula von der Leyen said the short work week initiative, modelled on the successful German Kurzarbeit scheme, “is intended to help Italy, Spain and all other countries that have been hard hit”.

“Companies are paying salaries to their employees, even if, right now, they are not making money. Europe is now coming to their support,” she said.

“If … companies run out of work because of a temporary external shock like corona, they should not lay off their workers.”

Click here to read the full article

Leave a Reply

Your email address will not be published. Required fields are marked *