In January 2021, approximately 9.58 million jobs in Europe’s three largest economies were being supported by temporary employment schemes, with the UK’s job retention scheme supporting approximately 4.88 million jobs, France’s Chômage partiel scheme 2.1 million, while 2.6 million workers were on Germany’s Kurzarbeit system. Although some of these partial employment mechanisms were already in place before the COVID-19 pandemic, their usage accelerated considerably after the first Coronavirus lockdowns in Spring 2020.Â
How much will this cost European governments?
Early on in the pandemic, European governments moved swiftly to limit the damage that the Coronavirus pandemic would cause to the labor market. The spectre of mass unemployment, which would put a huge strain on European benefit systems anyway, was enough to encourage significant government spending and intervention. To this end, the European Union made 100 billion Euros of loans available through it’s unemployment support fund (SURE). As of March 2021, Italy had received 20.95 billion Euros in loans from the SURE mechanism, and is set to be loaned 27.4 billion Euros overall. Spain and Poland will receive the second and third highest amount from the plan, at 21.3 billion, and 15.06 billion Euros respectively.
What about the UK?
The United Kingdom is not involved in the European Union’s SURE scheme, but has also paid substantial amounts of money to keep unemployment at bay. As of January 31, 2021, there had been more than 11.2 million jobs furloughed on the UK’s job retention scheme. By this date, the expenditure of this measure had reached 53.8 billion British pounds, with this figure expected to increase further, following the extension of the scheme to September 2021.