Four years have passed since the grim spring of 2020, when the first wave of Covid plunged our continent into a hitherto unimaginable nightmare. Most Europeans spent that Easter isolated from their loved ones, fearful not only for their health but also for their livelihoods, as economic activity fell off a cliff.
Europe’s single market faced a great fragmentation. Wealthier countries could spend whatever it took to protect their workers and firms, but what about those facing high public debt burdens? Tensions between north and south, the bitter legacy of the euro crisis, had not yet been laid to rest: The case for European solidarity was clear, but not easy to translate into common action.
The breakthrough came just hours before the Easter weekend. After an 18-hour videoconference, EU finance ministers gave their backing to a broad package of economic support measures. At its heart was SURE, an innovative €100 billion program that allowed the European Commission to raise money on the markets to lend to member states at favorable rates, to finance short-time work schemes providing furloughed workers with income while their jobs awaited their return.
For inclusive transitions
SURE ran until the end of 2022, and its impact was remarkable. The instrument supported about 31.5 million employees and self-employed people and more than 2.5 million businesses, mostly SMEs [small and medium-sized enterprises], in the 19 EU countries that applied for it. It also helped to pave the way for NextGenerationEU, the €800 billion funding program now supporting investments and reforms throughout our Union. Both played a key role in ensuring our economy could rebound quickly from the Covid shock, avoiding an even deeper socio-economic crisis.
Since the pandemic, Europe’s labor market has continued to evolve. Record low unemployment masks the fact that there are persistent labor and skills shortages. Europe’s social market economy model has stood the test of time, but the massive economic and demographic transformations we now face pose a huge challenge. For these transitions to succeed, they need to be inclusive. Social partners – employers and unions – have a fundamental role to play. The European Commission’s March 2024 action plan to tackle labor and skills shortages includes important commitments from the social partners to address poor working conditions and boost training.
There is a glaring need to address the skills gap: Three quarters of EU companies, especially SMEs, report difficulties in finding workers with the requisite skills. We must ensure businesses can access the talent they need and that workers at all stages of their careers can find good quality jobs. This will take a huge investment in human capital. Member states are investing around €65 billion of their EU funds in skills program, mostly from NextGenerationEU and the European Social Fund Plus.
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