Faced with an extraordinary drama such as the covid-19 pandemic, extraordinary remedies were also needed and applied in health and economic policy. One of them was the ERTE, as the temporary protection schemes for jobs that have already been tested in the past are known in Spain, but that three years ago were applied on a massive scale to avoid a socio-labour catastrophe. The measure required huge amounts of money and to finance it, the EU launched in April 2020 a fund that has served to protect almost 42 million jobs during its three years of validity, according to the latest monitoring report of SURE, official name of the financial instrument, published this Friday by the European Commission.
The figures for the three years that the program has been running, which formally ended in December 2022, are staggering. It has lent nearly 100,000 million euros under advantageous conditions to 19 member states, which have saved some 9,000 million in the operation, according to calculations offered by Brussels. The eight EU countries that did not ask for money, including Germany and the Netherlands, are the ones in the best fiscal situation and could therefore afford to finance the measure on their own.
It was in the first months of the pandemic that ERTEs were used the most. In Spain, they came to protect more than 3.4 million salaried jobs and more than one million self-employed workers, based on paying workers’ salaries and the corresponding contributions with public money. In this way, a greater impact was avoided due to the sanitary measures that forced the halting of a good part of the economic activity, which would have caused the destruction of jobs and companies.
Such a deployment of protection required a great budgetary effort, as shown by the fact that Spain borrowed 21,324 million from the Commission. Only Italy requested more, 27,438 million. Poland, Belgium or Portugal are the other countries that claimed the most money.
Greater reach in 2020
The greatest efforts were concentrated during the first year of validity of the measure, 2020. When SURE served to finance aid to 31.5 million workers hired by 2.5 million companies. The following year, the numbers are lower, despite the fact that the pandemic continued to wreak havoc and many measures to contain it continued to be applied. So, the covered jobs were about nine million in 900,000 companies. The last year, 2022, the numbers can be described as almost residual, since they barely reached 350,000 jobs and 40,000 companies.
This financial tool, approved on April 2, 2020, was the first big sign that the European Union was going to face this economic crisis with a very different paradigm from the one it had followed in the financial crisis. SURE was financed with a joint loan requested by the EU, although this cannot be classified as Eurobonds, since each Member State assumes its aliquot part of the shared credit risk and not 100%. A few months later it was completely demonstrated, when the Recovery Fund was approved, 750,000 million to promote the exit from the crisis and the economic transformation through subsidies and credits financed with joint debt issues of the EU.
There is little doubt about the success of those extraordinary labor measures three years later. For that, it is enough to look at the labor market numbers throughout Europe, with historically low unemployment figures, or, in the Spanish case, make a quick comparison with what happened in the three deep crises prior to those of the pandemic. In the oil crisis and the reconversion of the eighties, the one after the 1992 Olympic Games or the Great Recession, the unemployment rate was around 25% and it took many years to return to the numbers prior to the crash. This time it returned to the starting point barely a year later and this same Friday, just three years after the worst moment of the covid-19 when half of Spain was locked up in their homes, Social Security has published that there are 20.8 million affiliates registered, the highest figure in the historical series.
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