In early March 2020, working life in EU Member States came under enormous pressure due to the rapid spread of the COVID-19 disease and the precautionary measures taken by governments in subsequent weeks. This article gives a brief overview of the first reactions of European institutions and some of the responses by EU social partners to those challenges in the first quarter of 2020.
Introduction
The European Commission’s Winter Economic Forecast, presented on 13 February, already identified COVID-19 as a new downside risk for the European economy. However, it soon transpired that the scale and multidimensionality of the threat exceeded all expectations. As the EU has very little competence, under the Treaties, in health policy, this matter remains largely in the hands of individual Member States. The first emergency measures introduced by Member States included shutting down schools, decreeing social and physical distancing, closing borders and concentrating limited national resources on their own infrastructure. Due to the unforeseen and disruptive force of the pandemic, the nature of the European project – deeply rooted as it is in principles and policies such as solidarity and the free movement of people and goods – was under attack. This was accompanied by a growing threat to working life across the EU as a direct or indirect impact of the pandemic. The need for action at EU level became manifestly clear.
European institutions launch emergency actions
On 13 March, the European Commission set out its immediate response to mitigate the socio-economic impact of the COVID-19 pandemic, based on a European coordinated response. It endorsed the use of EU State aid rules to enable Member States to take swift and effective action to support citizens and companies, in particular SMEs, faced with economic difficulties due to the pandemic.
On 16 March, the Eurogroup (finance ministers of the eurozone countries) – now extended to all EU Member States – announced an agreement on the overall economic response to the COVID-19 outbreak. This included the exclusion of temporary fiscal measures taken in response to the COVID-19 crisis when assessing compliance with fiscal principles and making full use of the Stability and Growth Pact’s general flexibility clause for all Member States.
The Commission launched its Coronavirus Response Investment Initiative (CRII) on 18 March, aimed at mobilising cohesion policy to respond to the rapidly emerging needs in the most exposed sectors, such as healthcare, SMEs and labour markets, and help the most affected territories in Member States.
On the same date, the European Central Bank (ECB) announced the launch of its Pandemic Emergency Purchase Programme (PEPP). According to the ECB, the overall PEPP budget – already substantial at €750 billion or more than 6% of GDP – can be increased and its composition adjusted as necessary.
On 20 March, the Commission moved to suspend the Stability and Growth Pact by launching a general escape clause to allow Member States to pursue a fiscal policy that would facilitate the implementation of all measures necessary to deal with the crisis, including for companies and employees.
At the end of March, in the wake of restrictive measures introduced across Member States, including the reintroduction of checks at internal borders, the European Commission issued a Communication aimed at maintaining the free movement of workers in critical occupations. According to the Commission, Member States should allow frontier and posted workers to continue crossing their borders to their respective workplaces if work in the sector concerned is still allowed in the host Member State.
European social partners issue joint statements
On 12 March, trade unions and associations representing the entertainment and media sectors – UNI Global Union's entertainment and media sector, UNI-MEI, together with International Federation of Musicians (FIM), International Federation of Actors (FIA) and Pearle (representing more than 10,000 managers and employers in live performance in Europe) – issued a joint position. In light of the decisions of many governments to ban large gatherings, the social partners warned that without appropriate support measures, these decisions would have devastating economic and social consequences for the live performance sector. With the inevitable cancellation of many live events and tours, thousands of employees and self-employed workers in the sector would experience a sudden and dramatic loss of income.
On 16 March, the European cross-sectoral social partners (BusinessEurope, CEEP, ETUC, SMEunited) jointly urged the European authorities and Member States to approve all the measures proposed by the European Commission so far, without delay. In particular, they highlighted the urgency of the following measures:
- temporary suspension of the Stability and Growth Pact
- avoiding distortions of the single market, including export bans and restrictions on the export of medical equipment and medicines, and stopping the closing of borders for goods
- encouraging Member States to invest in staff, equipment and resources for national health services, social protection systems and other services of general interest
- mobilising unused structural funds and other EU funds to support Member States in providing financial and income support for unemployed or suspended workers, including non-standard workers and self-employed workers.
The social partners in maritime transport – the European Transport Workers’ Federation (ETF) and European Community Shipowners’ Associations (ECSA) – sent a letter on 18 March to the EU transport ministers ahead of their joint meeting. They warned that the measures being taken by Member States to restrict the movement of people, aimed at minimising the risk of infection, are having serious consequences for the movement of seafarers.
On the same day, social partners in the European port sector – European Transport Workers’ Federation (ETF Dockers), International Dockworkers Council (IDC), the Federation of European Private Port Operators (FEPORT) and European Sea Ports Organisation (ESPO) – prepared a joint statement calling on the European Commission and relevant bodies to provide guidance on measures to be applied in ports, in order to maintain the health and safety of dock workers. They also urged port companies to implement more stringent measures and to provide all the necessary means to protect workers.
On 25 March, the European Federation of Food, Agriculture and Tourism Trade Unions (EFFAT), together with employer organisation FoodDrinkEurope, issued a joint statement in which they stated that the entire food and drink industry should be regarded as ‘essential’ to maintain food security in Europe. They urged national governments and the EU institutions to assist companies operating in the food and drink sectors to source personal protective equipment for workers and to accelerate the set-up of centralised purchasing systems to avoid unfair competition. The signatories also called on the Commission to provide EU guidelines to Member States to establish uniform protocols to enable food sector workers to continue to work safely, as the protection of food workers' health should be a priority.
European social partners react unilaterally
In a statement issued on 13 March, SMEunited welcomed the COVID-19 crisis measures announced by the European Commission. [ At the same time, the organisation pointed to specific measures that should be taken for SMEs that have been significantly impacted by the crisis, such as: ensuring financial liquidity, offering income support for self-employed and SMEs out of businesses, introducing partial unemployment schemes and keeping supply chains open as far as possible.
In an open letter to EU authorities on 16 March, the European Public Service Union (EPSU) called for increased cooperation between Member States in terms of providing personal protective equipment (masks, aprons, medical goggles) and maximising its production. EPSU expressed deep concern over the temporary suspension of the possibility of exporting protective equipment by some countries. Germany, France and the Czechia, in particular, were urged to increase their production and unblock exports to the maximum possible level, and to share and coordinate supplies with other Member States.
On 19 March, ETUC issued an appeal to European authorities and governments, pointing out that societies were in a state of physical and economic danger and hence there was a need for extraordinary actions also in the macroeconomic sphere. They called for the immediate temporary closure of stock exchanges and stated that financial institutions, including private banks, should be prevented from gaining positive interest rates on loans, to save small and medium-sized businesses. They also demanded that special measures be taken to regulate the price of basic products and housing and that any abuses should be subject to severe penalties.
In a subsequent statement on 24 March, ETUC called on the Eurogroup to support the issue of EU ‘pandemic bonds’ issued at close-to-zero interest rates, aimed at financing infrastructure and supplies for national health systems, as well as employment-related emergency measures. According to ETUC, the spending policy should be entrusted to the European Commission in co-decision with the Council and the European Parliament and under consultation with social partners. It was also proposed to postpone the normal European Semester timetable.
On 24 March, European trade union IndustriAll called on employers to ensure that employees are not forced to go to their jobs if their activities are not necessary to manage the current situation and do not meet basic needs. Due to the suspension or limitation of production in many industries, social partners at all levels must work together to reach agreements on short-time arrangements that will ensure that employees receive the right level of wage compensation.
In a public letter addressed to the President of the European Council, Charles Michel, on 24 March – in advance of the Council’s videoconference in Brussels on 24 March – BusinessEurope appealed to European governments to maintain industrial activity as a crucial step to minimise disruption and job losses. BusinessEurope advised adopting a coordinated approach to what is critical infrastructure to allow companies to reorient their production to basic goods or services. In particular, the letter emphasised that the transportation of goods across borders within the EU single market must not be blocked and pressed for the urgent removal of export bans recently introduced by Member States on personal protective equipment, medical equipment and medical devices.
Finally, on 26 March, in another message to the European Council video conference, CEEP called upon Member State leaders to preserve European welfare systems and the social market economy. Valeria Ronzitti, CEEP Secretary General cautioned:
This crisis has put in broad daylight our critical lack of physical and social infrastructures at the European level. CEEP has long warned about the consequences of undifferentiated fiscal consolidation on the operational framework for Services of General Interests, while witnessing the unreserved support to the ‘for profit sector’ to prepare for the transitions.
Outlook
It is impossible to predict when the COVID-19 crisis will end, or what the political and economic consequences will be. To Europeans, the COVID-19 pandemic is first and foremost a public health crisis, as it is for the rest of the world. But it also presents a distinctive political and economic challenge to the European Union.
Too much remains unknown to assess the scale of unemployment that will be the consequence of the pandemic. It is also not currently possible to fully estimate what changes will occur in working conditions or social security. The basic question is to what extent the European social model can be preserved and what changes it will undergo.
Note: As a response to the COVID-19 crisis, Eurofound has reoriented the national country updates on working life. Correspondents will now report on national policy measures taken to address the economic and social effects of the crisis. Eurofound plans to publish a mapping report in June 2020.