Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of Regions - A Shared Commitment for Employment
Date: 2009-06-03
Institutions: European Commission
Subjects: EU programme, European Employment Strategy, action programme, employment policy, vocational training

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 3.6.2009 
COM(2009) 257 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF REGIONS 

A Shared Commitment for Employment  

VOLUME 2: ANNEXES 

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Annex 1 

RECENT EMPLOYMENT MEASURES TAKEN BY MEMBER STATES 

Introduction 

This  overview  presents  and  analyses  a  selection  of  recent  measures  enacted  in  each  of  the 
three priority fields identified in the Communication. It is based on work undertaken by the 
Commission services with the help of the EPC, EMCO and SPC representatives and should be 
read  in  conjunction  with  Annex  2  which  focuses  on  temporary  short-time  working 
arrangements.  It  also  includes  the  results  of  discussions  with  Member  States  and  social 
partners  in  three  workshops  leading  to  the  7  May  Employment  Summit  confirming  i.a.  the 
need  for:  maintaining  employment,  creating  jobs  and  promoting  mobility;  upgrading  skills 
and matching labour market needs; and increasing access to employment. 

Following  the  European  Recovery  Plan,  most  Member  States  have  set  a  national  recovery 
plan  including  provisions  for  employment  and  social  policies.  On  the  basis  of  information 
collected on the Stability and Convergence Programmes and their Addenda (national recovery 
plans) and through the policy committees, almost 300 measures have been identified as being 
announced across the EU. (See overview table1 page 8). 

The  measures  demonstrate  examples  of  targeted  and  productive  ways  forward  to  soften  the 
impact  of the  crisis  on  the  labour  market.  At  this  stage,  bearing  in  mind  that  there  is  still 
uncertainty  about  their  precise  outcomes,  and  that  the  effectiveness  of  these  measures  also 
depends on economic and labour market developments in individual Member States, it is not 
yet  possible  to  identify  "best"  practices  to  guide  policy  action  throughout  the  EU.  This, 
however, will be subject of work over the coming months in cooperation with Member States 
and  other  institutions  like  the  OECD.  However,  despite  the  fact  that  measures  vary  in  how 
they  meet  country-specific  situations,  there  is  a  clear  basis  –  as  acknowledged  in  the 
Employment  Committee's  contribution  to  the  Employment  Summit  (28  April  2009)  –  to 
achieve  agreement  already  at  this  stage  of  the  crisis  on  certain  policy  principles  to  assist 
European economies and labour markets thrive on recovery. 

Maintaining Employment, Creating Jobs, Promoting Mobility 

A first priority is to avoid job losses, particularly in sectors and firms that were fundamentally 
sound prior to the crisis. In particular, the Communication for the Spring European Council 
("Driving  European  recovery")  suggests  Member  States  focus  on  keeping  people  in 
employment,  notably  by  providing  financial  support  to  short  time  working  arrangements 
(STWAs).  It  appears  that  in  a  number  of  European  countries,  job  losses  have  indeed  been 
contained  so  far,  largely  due  to  these  measures.  With  the  risk  of  unemployment  increasing, 
better use of these arrangements must be ensured,  includingtheir accessibility for SMEs and 
workers on part time and non-permanent contracts. These improvements can include making 
eligibility conditional on pre-specified criteria, one of which may be the coupling of STWAs 

1  

First presented as part of the "Preliminary assessment of employment and social policies to soften the 
impact of the crisis" prepared for the EPC of 16/04/2009. 

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with  work-related  training  to  improve  the  employability  of  workers  and  ease  their  possible 
transition  to  new  jobs.  To  support  this  process,  the  Commission  has  identified  a  number  of 
elements through a stocktaking exercise with Member States2 (see annex 2)  

For measures to be well-targeted, one must minimise the risk of protecting non-viable firms in 
order  to  ensure  the  economy  can  reallocate  resources  to  more  productive  uses.  Measures 
should  also  exclude,  as  far  as  possible,  firms  that  would  have  retained  their  workers  in  any 
case.3  On  selecting  viable  firms,  some  Member  States  operate  STWAs  which  can  only  be 
used  by  firms  that  demonstrate  that  their  long-term  financial  position  is  sufficiently  sound 
according  to  government  set  minimum  thresholds.  Other  Member  States  have  solved  this 
problem  by  providing  lending  schemes  to  businesses  instead  of  subsidies.4  Alternatively, 
some  STWAs  (NL  and  to  some  degree  ES)  partly  subsidise  short-time  working  only  if  the 
worker is fully employed again after the STWA-period is over.  

Although  affecting  labour  markets  in  all  Member  States,  some  regions  or  countries  are  hit 
worse than others by the crisis. Experience shows that business cycle shocks can be softened 
by workers moving from regions with high unemployment to those with low unemployment.5 
However, geographic mobility in Europe is limited due to a number of obstacles. Aside from 
an uncertainty over the advantages of being mobile, individuals face a number of hurdles to 
free  movement. These  can range from legal and administrative  obstacles, housing costs and 
availability,  employment  of  spouses  and  partners,  portability  of  pensions,  linguistic  barriers 
and issues on problems with the acceptance of qualifications in other Member States.  

In  the  current  situation,  labour  market  policies  facilitating  mobility  might  be  asked  for,  like 
unemployment  benefits  designed  with  built-in  incentives  for  mobility.  Properly  targeted 
economic incentives could help job-seekers and workers to move within a country or across 
national  borders.  Another  example  is  the  removal  of  remaining  restrictions  on  the  free 
movement  of  workers  within  the  EU.  Belgium  and  Denmark  have  just  fully  opened  their 
labour markets to workers from the Central European Member States which joined the EU in 
2004 (Denmark also for Romanian and Bulgarian citizens). Lifting restrictions now also helps 
to  avoid  some  of  the  more  serious  problems  associated  with  closed  labour  markets,  in 
particular undeclared work, bogus self-employment and social dumping. 

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Meetings with the Employment Committee; and Member States replies to the joint questionnaire from 
EC and the OECD  
First Interim Report on the OECD's Strategic Response to the Financial and Economic Crisis, 11 March 
2009, OECD 
This  is  likely  to  act  as  a  self  selection  mechanism,  leading  more  healthy  firms  to  take  loans,  helping 
them to survive, while deterring less healthy firms  
For example, research for the US suggests that about half of any business cycle shock is absorbed by 
people moving around. In the current downturn a significant number of US workers are unable to move 
because they are tied to their region as they are unable to sell their property.  

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Member  State  and  stakeholders'  views  on  possible  areas  of  concrete  EU-action  as  reflected  in  the 
Prague workshop 'Maintaining employment, creating jobs, promoting mobility':6 

•  Use of the ESF more for supporting short time working schemes.  

•  Support anticipation and management of restructuring. 

•  Do more to improve occupational mobility. 

•  Monitor applications of the Posted Workers Directive.  

Upgrading Skills, Matching Labour Market Needs 

Skills  are  critically  important  for  Europe's  future  growth  and  productivity,  its  capacity  to 
adapt to change and create quality jobs and the crisis now provides an opportunity to invest in 
skills via education and training. Young people, given their lack of work experience and being 
at  the  early  stages  of  skills  development,  are  critically  affected  by  the  current  crisis.  Skills 
matching and upgrading is essential in the short  term, and it is also the best way to address 
structural  changes  and  exploit  new  opportunities  for  sustainable  jobs,  such  as  the  shift  to  a 
low-carbon  economy,  green  jobs  and  the  development  of  new  technologies.  Training  and 
retraining  are  essential  to  occupational/professional  mobility  in  mid  to  longer  term 
perspectives, as many people who lose their job now will not be able to get back into their old 
job,  occupation,  or  industry  after  the  crisis.  Indeed,  the  crisis  may  be  an  opportunity  for 
people to change professional track and move into more promising occupations. Moreover, in 
the  long  run,  Member  States  will  need  to  have  a  highly  skilled  and  educated  workforce  to 
ensure that the EU continues to compete on the quality of its products and services.  

Training opportunities and incentives have been expanded in most countries in the face of the 
crisis  (e.g.  AT,  BG,  EL,  FI,  FR,  HU,  PT,  RO,  SI,  SE,  UK).  On-the-job  training  was 
increasingly recognised as a key tool for improving the employability of employed workers. 
RO introduced a 50% support for costs of continuous vocational training for both employees 
and unemployed. DE established a new programme to support further vocational training for 
temporary workers, through a system of training vouchers. PT expanded the provision of job 
training  to  beneficiaries  of  minimum  income.  Financial  support  for  access  to  education  was 
enhanced in AT, PT and SE.  

Furthermore, 19 EU countries have introduced measures to improve the design and capacity 
of  their  active  labour  market  policies  (ALMPs)  and  training  offers  to  respond  to  the  new, 
pressing needs resulting from the widening of the crisis. Some countries invested heavily in 
improving  and  tailoring  services  provided  by  their  public  agencies  to  ease  labour  market 
transition (DK, EL, FI, UK), whilst others only introduced minor changes to date (IT, MT). 
The  majority  of  interventions  have  been  characterised  by  clear  targeting,  to  adequately 
respond to changing needs and priorities. Measures explicitly designed to support and ease the 
re-integration into the labour market of recently laid-off workers were adopted in at least ten 
Member States (AT, BE, FI, FR, ES, NL, SE, SI, SK and UK). 

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Workshop "Maintaining employment, creating jobs and promoting mobility" Prague, Czech Republic - 
27th April 2009 

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Modernising capacities of Public Employment Services 

Modernising  and  improving  the  administrative  capacity  of  Public  Employment  Services 
(PES) has been a central focus for several Member States (DE, DK, EL, ES, FR, HU, SE, SK 
and UK) in response to the growing numbers of new unemployment benefit applicants and of 
clients in need of labour market assistance. It is important to assess the capacity to deal with 
current  needs,  resulting  from  the  significant  inflows  of  new  clients.  At  least  three  major 
changes have occurred relative to the situation facing the pre-crisis: i) the number of clients is 
growing,  and  will  continue  to  grow  at  a  fast  pace  ii)  the  general  skills  profile  of  clients  is 
higher  than  before  and  iii)  the  effectiveness  of  counselling  and  placement  activities  is 
expected to be generally lower than in normal cyclical conditions because of the lower level 
of vacancies during recession.  

Given  these  changes  in  the  market  for  employment  services,  some  Member  States  are 
considering introducing private incentives in outplacement and employment services. Along 
these lines, three ideas are worth mentioning: i) steering towards public private partnerships 
between public employment agencies and private human resource firms to accommodate the 
increased demand for placing and counselling activities, ii) making use of the expertise that 
private (out) placement agencies have with the increased variety of skills, education and work 
experience of their clients, and iii) creating positive outplacement incentives for the "former" 
employer letting some of its workforce go.7 

Some  countries  also  focused  on  reinforcing  the  preventative  arm  of  their  ALMPs.  NL 
developed  so-called  "mobility  centres",  temporary  public-private  partnerships  aimed  at 
intensifying timely assistance to jobseekers and businesses, to prevent forced lay offs as far as 
possible. Employees who are threatened by unemployment will be assisted in finding a new 
job,  or  temporarily  be  sent  on  secondment  with  other  employers,  if  necessary  through 
additional education and training.  

Subsidised  job  creation  schemes  in  the  public  sector  have  been  introduced,  notably  in  CZ, 
HU,  SK  and  RO.  While  such  schemes  could  prove  necessary  at  a  certain  stage  -  in  case  of 
very large unemployment growth, to prevent severe social consequences of the crisis, but also 
to  prevent  discouragement  of  disadvantaged  groups  and  to  preserve  the  mutual  obligations 
approach of social security systems - they need to be well targeted and properly designed to 
avoid longer term negative effects on both public budgets and their beneficiaries.  

Member State and stakeholders' views on possible areas of concrete EU action as reflected in 
the Madrid workshop 'Upgrading skills, matching labour market needs':8 

•  Exploiting  the  possibilities  of  the  European  Social  Fund,  for  skills  upgrading  and  to 
increase  anticipation  and  forecasting  capacity,  including  frontloading  ESF  spending  in 
2009-2010.  

•  Using the ESF for facilitating recognition of qualifications for people who are entering or 
moving within the labour market. Possible issues for improvement are the harmonization 
of  qualifications  and  increasing  the  number  of  apprenticeships  for  young  people  leaving 
school. 

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Based on the notion that this firm knows best the qualities of the workers it lets go and may know about 
alternative placement opportunities in its sector or region. 
Workshop "Upgrading of skills, matching of labour market needs" Madrid, Spain - 15th April 2009 

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•  Identification  of  best  practice  and  benchmarking,  to  help  Member  States  and  social 

partners learn from each other.  

•  Promoting  mobility  to  facilitate  the  transitions  into  jobs  within  Europe.  Enhancing  the 

EURES portal to improve the transparency of mobility.  

•  Better anticipation of skills needs. The New Skills for New Jobs initiative is the beginning 
of a process; the Commission should help improve the capacity at EU, Member State and 
sector level. 

There  is  a  clear  role  for  mutual  learning  about  ALMP  effectiveness  at  the  EU  level.  So  far 
evidence  suggests  that  well  placed  training  policies  (meeting  firms  needs),  together  with 
counselling/placement  activities  of  PES  are  among  the  most  effective  types  of  ALMPs  in 
terms of raising the chances of being hired and/or keeping a job for longer.9 Labour market 
training per se does not create jobs and needs to be seen as complementary to other ALMP 
measures. In short, these measures that are often supported by the European Social Fund are 
valuable  both  for  increasing  employability  and  improving  matching  of  people  with  vacant 
jobs.10  

EU, Member States and Social Partners should step up their efforts to avoid larger numbers of 
young people falling into long term unemployment. This is all the more needed as time spent 
out of education or employment when young can have lasting effects. One example of such 
action is that in NL, social partners have agreed to ensure an apprenticeship place for every 
school-leaver who has been unemployed for at least three months. Other unemployed aged up 
to  27  will,  according  to  proposed  legislation,  receive  a  working/learning  offer  from  their 
municipality.  

Increasing Access to Employment 

Joblessness, whether due to unemployment or inactivity, is one of the main driving factors of 
poverty and exclusion. According to most recent data (2006) 27% of the inactive in the EU 
live  below  the  poverty  line,  and  the  corresponding  figure  for  the  unemployed  is  as  high  as 
41%, with a peak of 60% or more in some Member States. These are worrying figures in the 
context of what does not seem to be a short-lived economic crisis. Moreover, reduced demand 
is  probably  a  short-term  phenomenon  and  most  longer-term  projections  foresee  increasing 
labour shortages due to the ageing of our societies.  

Supporting employment by reducing labour costs and reinforcing activation 

Rebates on social security contributions to boost labour demand during the crisis are typically 
made  conditional  upon  job  creation  (BE,  ES,  FR  HU,  PT,  SE,  SK).  Measures  are  often 
targeted  at  those  most  difficult  to  employ,  sometimes  to  SMEs  (e.g.  FR,  PT)  or  to  the  self-
employed  (SI,  SK).  In  a  few  cases  the  fiscal  boost  was  directed  towards  sustaining 
employment in specific sectors, such as household-related employment services and building 

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More evidence can be found in Chapter 3 of Employment in Europe 2006, and references found there. 
European  Employment  Observatory,  11.04.09,  Background  paper  on  measures  to  deal  with  the 
economic crisis 

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maintenance  (DE,  SE),  or  strategic  activities  or  sectors  such  as  R&D  and  investment  and 
renewable energies (BE, ES). 

Lowering labour costs for both employers and employees featured already in some medium-
term  national  reform  programmes,  in  line  with  the  Country-Specific  Recommendations  or 
Points to Watch under the Lisbon Strategy, and gained additional relevance in the framework 
of the crisis (BE, FR, SE, DE). Increased competitiveness was pursued also in the NL, where 
wage  moderation  over  the  medium  term  was  traded  against  cuts  in  social  security 
contributions  for  both  employers  and  employees.  In  the  same  vein,  BE  extended  the 
intersectoral structural wage adjustment system, which is a scheme consisting in a reduction 
of wage costs and taking the form of a partial exemption from the withholding tax on wages. 
HU froze minimum wages in an attempt to preserve employment. BG announced its intention 
to align wage increases in the public sector with productivity growth. 

Improving the incentives to work embedded in the tax and benefit system was also high on 
the  policy  agendas,  and  in  line  with  the  long  term  goals  of  most  countries.  Income 
supplements and targeted in-work tax credits (BE, NL, SE, SK) were reinforced, the design of 
unemployment  insurance  modified  so  as  to  increase  work  attractiveness  (BG,  ES,  IT),  and 
new  social  assistance  schemes  implemented,  conditional  upon  availability  to  work  (FR).  A 
few measures were also taken to support female labour market participation (e.g. MT, NL).  

Apart from tax measures, where the tax pressure on labour was mainly reduced especially for 
low-wage earners (e.g. FI, MT, PL, SE), most of these measures appear to be temporary and 
contingent  to  the  economic  crisis.  The  risk  of  permanent  adverse  effect  on  public  budgets 
seems to be quite limited in this field.  

Mitigating the impact of financial crisis on household and individuals 

Most  Member  States  have  taken  action  to  provide  additional  support  to  people's  income, 
although to different degrees. Measures range from increasing the level of minimum income 
or minimum wage, extending the coverage or duration of unemployment benefits, reinforcing 
other  social  benefit,  to  introducing  tax  rebates  or  exemptions  for  specific  groups. 
Comprehensive  social  welfare  packages  were  adopted  in  IE  and  UK,  to  face  the  social 
consequences of the crisis in an integrated way. In IE, this includes increases in old-age and 
other pensions, fuel allowances, unemployment and child benefits. Measures have been taken 
to protect mortgage holders against repossessions, to address over-indebtedness, or to create 
incentives for banks to give access to credit to individuals, including people on low income 
(ES, FR, IT, PT).  

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Member  State  and  stakeholders  views  on  possible  areas  of  concrete  EU-action  as  reflected  in  the 
Stockholm workshop:11 

•  Better use of the ESF for active inclusion measures. 

•  Ensure  older  workers  and  other  potentially  vulnerable  groups  see  specific  measures  for 

staying or regaining employment such as reduced social security contributions. 

•  Envisage greater use of employer financed funds to provide training for about-to-be made 

redundant workers. 

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Workshop "Increasing access to employment" Stockholm, Sweden - 20th April 2009 

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Overview of labour market and social protection measures in Member States' recovery efforts (as of 31.03.2009)* 

No of 
measures  

Countries 

Best practices 

Consistency with principles/criteria suggested in the Commission 
Communication for the Spring European Council 'Driving European 
Recovery' (COM (2009) 114 final) 

HIGH 

MEDIUM 

LOW 

Encouraging 
working-time 

flexible 

Improving  job  placement 
and investing in re-training 

Maintaining/reinforcing 
social protection 

 Reinforcing activation 

Supporting  employment  by 
cutting labour costs  

 Revising  EPL  in  line  with 
flexicurity 

Enhancing  education  and 
life-long learning 

Supporting 
purchasing power 

household 

20 

64 

21 

34 

35 

2 

10 

48 

16 MSs: AT, BE, BG, CY, CZ, 
DK, DE, FR, HU, IT, LT, LU, 
NL, PT, SI, SK 

21 MSs: AT, BE, BG, CZ, DK, 
DE, EL, ES, FI, FR, HU,IE, IT, 
MT, NL, PT, RO, SE, SI, SK, 
UK 

12 MSs: BE, BG, EL, FI, FR, 
IE, IT, LV, PT, RO, SE, UK 

19 MSs: AT, BE, BG, CZ, DK, 
DE, EL, ES, FI, FR, IE, IT, LT, 
LU, MT, PL, SE, SI, SK 

17 MSs: AT, BE, BG, DK, DE, 
ES, FR, HU, LT, LU, LV, NL, 
PT, RO, SE, SI, SK 

4 MSs: BG, EE, CY, LT 

7MSs: AT, BG, DK, DE, LT, 
PT, SE 

18 MSs: AT, BE, BG, DK, DE, 
ES, FI, FR, IT, LU, LV, MT, 
PL, PT, RO, SE, SK, UK 

9 

24 

0 

5 

5 

0 

1 

3 

15 

33 

4 

8 

11 

2 

4 

4 

5 

33 

17 

31 

26 

2 

10 

42 

1 

0 

1 

0 

0 

0 

0 

1 

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Mitigating  the  impact  of 
financial 
on 
individuals 

crisis 

Others 

27 

12 

13 MSs: AT, BG, CZ, EE, ES, 
FI, FR, HU, IE, IT, LT, LU, PT 

11 MSs: AT, BE, CZ, DK, EE, 
FI, FR, LT, LV, RO, SE 

2 

0 

1 

1 

25 

7 

0 

3 

* Information is based on National Recovery Plans and information provided by EPC, EMCO and SPC members. Since the data are currently in the process of being collected the overall 
picture on measures adopted to respond to the crisis is still incomplete.  

** Nine main types of policy action have been identified. Each measures is assigned to one or several of these types of policy action: note a single measure can be classified under 
several headings and thus a degree of double counting occurs which explains why the totals do not sum up. Each measure is assessed using criteria such as timeliness, the degree of 
targeting, the time consistency of short-term support measures with long-term policy such as those in the Lisbon strategy, and the possible need for coordination in light of cross-
border  spill-overs.  On  this  basis,  it  is  possible  to  tentatively  identify  a  number  of  measures  which  can  be  considered  as  best  practice  and  thus  which  could  be  useful  for  other 
Member States to consider (for details on this assessment refer to the note prepared by DG ECFIN for the EPC of 16/04/2009 "Preliminary assessment of employment and social 
policies to soften the impact of the crisis"). Also, a preliminary attempt has been made to assess the consistency of measures relative to the principles/criteria. A 'high' degree of 
consistency is considered to occur when the measures are considered to be ambitious and comprehensive enough. A 'medium' degree of consistency is considered to occur when 
measures go in the right direction but are relatively limited in scope. A 'low' degree of consistency is considered to occur when measures potentially go in the wrong direction 

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Annex 2 

PROMOTING TEMPORARY SHORT-TIME WORK 

Overview: Short-Time Work to Maintain Employment  

In  response  to  the  deteriorating  employment  situation,  several  Member  States  have 
introduced, or are introducing, different forms of public support, to encourage businesses to 
use  temporary  short-time  working  arrangements  (STWAs)  instead  of  making  employees 
redundant.  It  appears  that  in  a  number  of  Member  States,  job  losses  have  indeed  been 
contained  so  far,  largely  due  to  these  measures.  With  the  risk  of  unemployment  increasing, 
better  use  of  these  arrangements  must  be  ensured  and  to  ensure  accessibility  for  SMEs  and 
workers  on  part  time  and  non-permanent  contracts.  Experience  gained  so  far  and  possible 
extension  of  such  measures  provide  the  opportunity  for  closer  monitoring  and  exchange  of 
best practice at EU level. 

Country Experiences 

Within the last few months, 12 Member States have introduced (SI, HU, BG), extended (AT, 
DE, NL), or made use of provisions for flexible working time (e.g. ES, BE, DK, FI, FR, IT, 
SE).  Some  others  are  planning  to  follow  the  same  direction  (CZ).  The  measures  allow 
companies to temporarily reduce work levels or wages below the contractual agreement or to 
momentarily suspend all, or part of, its activity. In these cases, any loss of employee salary is, 
in almost all cases, partly or fully compensated by the State.  

Member  States  mainly  provide  support  through  wage  top-ups  to  compensate  for  shortened 
working hours (AT, IT, SI, SK) and/or temporary unemployment benefit if a full suspension 
from work is  taking place (BE, FR). The  level of public support under those schemes is, in 
some  countries,  higher  than  the  minimum  wage  or  the  normal  unemployment  benefit  (AT, 
BE). At the same time, as a consequence of the financial crisis, a number of countries have 
relaxed/extended certain eligibility criteria and have increased the amount of financial support 
that  is  available  for  employers;  e.g.  in  AT  and  DE,  social  security  contributions  that  are 
normally met by employers are now being met, or part-met, by the State. Similarly, in some 
cases, the country is reimbursing or subsidising training costs (DE, HU, SI), and/or travel and 
childcare expenses (DE).  

In  most  cases,  there  is  a  requirement  in  place  for  companies  to  demonstrate  the  clear 
economic  reasons  for  engaging  with  any  reduced  working  time/temporary  unemployment 
scheme: decreased orders/loss in demand (BE, DE, FI); restructuring (FR, IT). Some Member 
States  who  have  introduced  new  measures  require  the  employer  to  establish  a  plan  for 
sustained employment after completion of the scheme (AT, HU). Some countries have tried to 
encourage  the  further  training  of  workers  who  are  on  temporary  unemployment/reduced 
working time schemes (AT, BE, DE, HU).  

The time limits for the use of any such scheme differ widely between the Member States, with 
some schemes being made available for 3 months (BG, FI), others for up to 18 months (AT, 
DE), and in some cases for up to a maximum of 36 months (IT).  

There  are  some  differences  in  how  countries  manage  the  provision  of  support.  Whilst  most 
manage  and  monitor  the  funds/support  themselves  through  employment  agencies  (AT,  DE, 

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BE,  SI),  in  other  MS  the  scheme  is  managed  by  agreements  between  social  partners  and 
individual enterprises (IT, SE). The latter option may contain some potential benefits, such as 
the removal of an administrative burden and the insurance of greater levels of collaboration 
and agreement between the parties affected. 

Expected Benefits of Temporary Short-Time Working Arrangements  

The  rationale  for  instituting  systems  of  temporary  partial  unemployment/reduced  working 
time during a crisis is based on the critical success factor of maintaining employment, which 
itself  can  be  linked  to  a  range  of  economic  and  social  benefits,  such  as  supporting  incomes 
(including of disadvantaged groups) and preventing social costs. 

At  the  level  of  the  individual  company  and  worker,  such  schemes  can  be  beneficial  in 
reducing  wasteful  shedding  and  providing  job  security  to  workers  otherwise  being  made 
redundant,  as  well  as  allowing  companies 
to  protect  human  capital  and  retain 
experienced/skilled  workers,  thereby  preventing  loss  of  “match  specific”  capital.  Individual 
workers also benefit from protecting their own skills. If complemented with targeted training, 
whether  specific  to  an  individual  company  or  more  generally  applicable,  the  measures  can 
bring  long-term  benefits  to  both  workers  and  companies,  in  terms  of  driving  up  the 
individual skills base. 

Furthermore,  such  systems  are  often  considered  less  costly  for  companies  than  making 
workers  redundant,  and  then  re-hiring  them  after  a  period  of  unemployment,  as  well  as 
assisting  in  the  prevention  of  redundancies,  the  maintenance  of  purchasing  power,  the 
preservation  of  functioning  plants,  and  the  bolstering  the  morale  of  staff,  and  indeed  the 
overall population, during economically difficult times. 

At a governmental level, such schemes can assist in reducing the number of benefit claimants, 
and  consequently  benefit  claim  costs,  as  well  as  cushioning  the  impact  of  the  crisis  and 
providing time to put in place structural measures. 

Potential risks and concerns 

A number of potential risks have, however, been identified with the implementation of these 
measures.  Beyond  the  overall  financial  concerns  –  i.e.  the  extent  and  duration  of  public 
funding,  and  the  balance  between  public  and  private  contributions  -  the  most  prominent 
shortcoming of STWAs is that they may not be able to differentiate between cyclical and 
structural problems within individual companies. 

By supporting private industry with financial assistance from the state, there is the potential to 
inadvertently introduce perverse incentives, which may encourage some companies to avail 
of financial support and assistance, even though they may have no real need to avail of such 
funding. 

STWAs are designed to be short-term measures. Therefore, in the case of a prolonged crisis, 
they  risk  losing  their  effectiveness,  as  any  move  towards  long-term  implementation  will 
diminish  the  benefits  derived  from  STWAs'  temporary  nature,  and  limit  the  capacity  for 
adjustment. Similarly, if schemes last over an extended period with an increasing percentage 
of  time  spent  not  working,  then  any  accompanying  measures  (validated  workplace  training, 
skills  coaching)  may  result  in  over-shooting.  This  point  also  gives  rise  to  the  notion  that 

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STWAs are not at their most effective when implemented in isolation, but should therefore be 
examined in comparison and conjunction with other ALMPs. 

It has also been noted that there is currently a lack of uptake by SMEs and micro-businesses 
due  to  the  significant  administrative  burden  that  some  schemes  can  entail,  and  other 
companies may be reticent about implementing STWAs, as this can be construed as negative 
publicity. Similarly, they are often limited to full-time contractual workers. 

Effective Short-Time Working Arrangements 

Short-time  working  arrangements  (STWAs)  can  be  an  effective  way  of  preserving 
through 
employment,  preventing  unemployment,  and  maintaining  purchasing  power 
compensation of lost earnings. The ESF can and should be used more intensively to support 
them,  especially  for  financing  training  that  should  be  concomitant  (see  annex  3  for  details) 
The  following  elements  could  help  maximise  their  benefits  and  reduce  their  potential  risks. 
STWA should:  

•  support  sustainable  jobs  in  small  and  large  businesses  that  are  suffering  from  cyclical 
difficulties,  but  are  likely  to  be  competitive  with  recovery.  They  should  not  be 
discriminatory  on  any  ground,  including  gender  and  the  contractual  status  of  the  worker 
concerned,  and  be  consistent  with  existing  Community  State  aid  rules.  In  particular,  this 
might be the case when the measure concerned is general and when the public support is 
provided  directly  to  the  workers.  STWA  should  have  clearly  defined  compensation 
parameters  in  place  for  workers,  to  address  any  hours  of  pay  lost,  including  a  maximum 
number of days per week not working, as well as have agreed and appropriate parameters 
for the payment of employers’ social security contributions for hours not worked.  

•  see  targeted  training  provided  during  a  substantial  proportion  of  those  hours  that  are  not 
worked  but  are  compensated,  to  ensure  longer-term  benefits  and  competitiveness  for 
companies. Training should be delivered in line with robust labour market information, or 
to develop individuals for employability progression/transition. Clear rules should specify 
whether the public authorities, the company, or the individual pay for training, and whether 
there should be training incentives. Sanctions should be in place to prevent informal work 
during non-worked, but compensated hours; 

•  be timely, accessible, and have minimal bureaucratic burdens on companies, to encourage 
SMEs  and  micro-businesses  to  take  up  such  schemes;  they  should  be  implemented  and 
supported through full cooperation with relevant social partners. A positive presentation of 
the benefits of the schemes should aim at improving the company's image both internally 
and externally; 

•  see the renewal of any such scheme involves the prior consideration of three factors: i) the 
compatibility  with  long-term  reform  objectives  (enhanced  competitiveness,  sustainability 
of public finances) and flexicurity principles; ii) the explicit preference to alternative active 
labour market policies; and iii) the link with the national recovery framework; 

•  be  designed  as  short-term  measures,  have  a  clear  time  limit,  after  which,  alternative 
solutions  should  be  sought  in  order  not  to  inhibit  necessary  restructuring  and  adaptation 
stemming from structural change; 

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•  be part of the peer review exercise, and should figure in the yearly assessment of Lisbon 
NRP  and  recovery  plans.  The  exchange  of  information  on  the  different  national  STWA 
schemes and an EU coordinated approach are essential to avoid negative spill-over effects 
that  may  damage  growth,  undermine  the  functioning  of  the  internal  market,  or  further 
hamper job prospects. 

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Annex 3 

Rapid reaction packages 

BETTER USE OF THE ESF 

Several  Member  States  are  already  using  European  Social  Fund  (ESF)  resources  to  palliate 
the negative consequences of the crisis; examples are presented in the sections below.  

However, ESF rapid reaction packages, adapted to the situation of each Member State, should 
provide a more comprehensive, focussed and strategic support to the EU Shared Commitment 
for Employment, its three key priorities and its actions in accordance with existing State aid 
rules. 

(a) Maintaining employment, creating jobs and promoting mobility 

threatened  by  unemployment, 

jobseekers  and  companies 
Supporting  workers 
undergoing restructuring. Member States should fully use the ESF to support employment, 
facilitate  restructuring  and  promote  mobility.  In  particular,  the  ESF  should  provide  skills 
upgrading  services  during  the  paid  down  time  when  short  time  working  arrangements  are 
introduced. For those workers at risk of unemployment this can be coupled with guidance till 
the new job is found, support to set-up new business and with financial incentives to increase 
mobility  to  regions  with  job  vacancies.  Guidance  towards  new  opportunities  in  the  greener 
economy should be taken into consideration especially in sectors where a lack of awareness 
about market and technology evolution might result in scarce training opportunities. The ESF 
can  support  the  adaptation  of  companies  undergoing  restructuring  which  can  be  made 
conditional  on  putting  in  place  restructuring  or  training  plans.  To  support  job  creation 
employment incentives can be offered to companies to recruit recently unemployed people or 
to provide employment to those groups which face particular difficulties to find employment. 
Timely delivery of such measures is crucial: best results are achieved when the assistance is 
provided before workers are made redundant.  

Examples of ESF interventions: 

Several  Member  States  are  already  using  the  ESF  for  such  measures,  offering  threatened 
companies assistance before the lay-offs occur including career advice, job search assistance, 
job brokering, skills upgrading and (re)qualification. For example, in Spain the ESF supports 
training for those on a temporary suspension of their employment contracts and reacts when 
the redundancy procedures lead to closing of the company. Also in Spain, and under the UK 
regional programmes, the ESF provides rapid assistance for companies where more than 20 or 
25  redundancies  occur  or  for  local  communities  disproportionately  affected  by  multiple 
smaller  scale  redundancies.  Training  is  already  offered  to  short-time  working  employees  in 
the Czech Republic, Italy, Portugal, UK, Hungary, Bulgaria, Greece and Germany, where the 
ESF also finances training in transfer companies. Mobility incentives helping people to take 
up jobs in other regions than their current one are part of broader ESF packages in Poland and 
Spain and are also developed in Bulgaria. Some ESF measures are tailored to address workers 
in sectors most hit by the crisis: for example, construction and tourism in Greece, textiles and 

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clothing  in  Italy  or  the  automotive  sector  in  Portugal.  Romania  launched  ESF  schemes 
encouraging  job  creation  through  salary  subsidies  for  the  recruitment  of  unemployed 
disadvantaged  workers,  vocational  training  and  the  improvement  of  health  and  safety 
conditions. In the UK, the ESF provides wage subsidies to hire people who have recently lost 
their  jobs.  Grant  schemes  for  employers  to  finance  up-skilling  of  their  staff  on  partial 
unemployment and the development of in-company training programmes, training of trainers 
and  human  resources  management  systems  are  implemented  in  the  Czech  Republic.  In-
company related training is also financed in Belgium and Austria. 

Promoting entrepreneurship and self-employment. A significant amount of ESF resources 
should  be  devoted  to  job  creation  and  to  incentives  to  establish  a  business  or  become  self-
employed.  These  initiatives  can  be  particularly  attractive  for  the  young,  people  active  in 
household  and  care  services  and  women.  This  possibility  has  not  been  widely  used  in  ESF 
programmes to date but it has a substantial potential in today’s context where lack of capital 
can be a hindrance for starting up your own business. The ESF should also provide help for 
borrowers  to  design  viable  business  plans;  interest-rate  rebates  to  bring  down  the  cost  of 
borrowing;  and  mentoring  in  the  first  months  or  years  of  new  business.  Wider  ESF  actions 
promoting  entrepreneurship  can  stimulate  job  creation  and  acquiring  important  skills.  The 
potential  of  job  creation  in  the  low-carbon  economy,  renewable  energy  sector  and  other 
developing sectors should be explored. Where possible the ESF should also assist in reducing 
red tape and simplifying administrative procedures to establish a business. 

Examples of ESF interventions: 

It  is  encouraging  that  there  are  already  several  examples  of  ESF  support  for  new  start-ups. 
Slovenia  has  been  successful  in  promoting  self-employment  through  subsidies.  In  Slovakia 
support is offered in the form of social and health insurance contribution for a limited period 
of time. Strengthening support to self-employment is also foreseen in Latvia. ESF activities in 
Bulgaria  concentrate  on  developing  entrepreneurship  skills  through  the  training  of 
unemployed  persons  who  would  like  to  start  their  own  business.  The  ESF  has  also  some 
experience  in  reducing  red  tape  and  facilitating  administrative  procedures:  for  example  in 
Portugal  the  reform  of  public  services  provided  to  enterprises  permitted  a  decrease  in  the 
number of days needed to open a business from around 60 some years ago to a day now.  

(b) Upgrading skills, matching labour market needs 

Matching  skills  and  labour  market  needs.  The  ESF  should  strengthen  the  capacity  of 
regional and national actors to better anticipate and forecast future skills needs and to better 
match  skills  demand  with  skills  supply.  One  important  element  is  investment  in  the  quality 
and  accessibility  of  education  and  training  systems.  Linking  these  systems  closer  to  labour 
market  needs  must  be  a  priority  in  the  times  of  crisis;  these  measures  should  include  the 
introduction  of  new  curricula  and  training  paths  on  entrepreneurship  and  the  "greener" 
economy  with  the  use  of  modern  training  methods  and  ICT  tools.  The  ESF  should  also 
support  companies  to  better  understand  their  skills-needs  and  better  exploit  the  existing 
competences of their workers. Support to researches to strengthen innovation should also be 
considered. 

Examples of ESF interventions: 

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A  significant  number  of  ESF  interventions  support  skills  upgrading  and  new  qualifications. 
For example, in Spain the ESF targets new sectors with a high potential of job creation such 
as renewable energy sources, waste management, care services and high-technology sectors; 
the ESF scheme "Green Employment" trains in eco-innovation and sustainable development, 
and  supports  the  creation  of  new  companies  in  this  area.  Italy  also  supports  innovative 
sustainable companies. 

In the UK the ESF supports apprenticeships. In Ireland, the number of places on ESF funded 
short term training courses has been significantly increased to cope with the recent surge in 
job losses. Luxembourg supports training for workers in public works and in the construction 
sector  to  better  link  the  competencies  with  the  changing  labour  market  needs.  Bulgaria  is 
developing  a  voucher  scheme  for  training  of  laid-off  workers;  matching  is  ensured  by  an 
employer survey and by commitment to subsequent employment prior to the training. To meet 
the needs of adaptability and employability, the ESF in Sweden aims at improving the supply 
of  skills  through  competence  development  schemes.  In  France,  the  ESF  is  part  of  a  social 
investment  scheme  for  2009-2010  which  brings  together  all  available  funding  and 
stakeholders to deliver required vocational training to different target groups. 

Strengthening  the  anticipation  capacity  in  Poland  and  in  the  Czech  Republic  includes 
development of an instrument which should enable better monitoring of the labour market and 
the  individual  sectors  and  thus  strengthen  anticipation  of  the  restructuring  processes. 
Similarly,  Germany  is  developing  an  instrument  for  modeling  current  and  future  labour 
market requirements, while Finland is developing a labour market anticipation methodology 
examining future business developments.  

Immediate support for young people. The ESF must provide urgent and substantial help to 
tackle  the  rapidly  deteriorating  employment  situation  of  young  people,  particularly  of  those 
concluding  their  education  in  2009  and  2010.  The  ESF  should  be  used  to  ensure  access  to 
guidance and/or further training, and provide activation measures to every young unemployed 
person  at  a  very  early  stage.  Tailored  ESF  packages  should  in  particular  focus  on:  creating 
more places in training and formal education and strengthening the quality and labour market 
relevance of skills and competencies; introducing entrepreneurship and "green" education in 
schools and universities; incentives for companies to provide internships, apprenticeships and 
employment for young people; support for entry into third sector or social economy jobs, and 
lengthening the education period to upgrade the achieved qualification level through training 
grants  or  loans.  Furthermore,  the  ESF  can  help  preventing  early  school  leaving  and  school 
dropping-out through the provision of alternative education pathways, second-chance schools, 
early identification of at-risk pupils, and specific programmes including additional classes and 
pedagogic support for at-risk youngsters.  

Examples of ESF interventions: 

In  Slovenia,  the  ESF  subsidises  employment  for  young  people  entering  the  labour  market 
after having finished university. In Spain, a "school-workshop" programme seeks to insert the 
young  unemployed  people  into  the  labour  market  through  a  combination  of  training  and 
professional  practice.  To  combat  early  school  leaving  and  dropping  out  from  the  education 
system,  the  ESF  financed  in  Spain  the  creation  of  a  national  network  based  on  a  broad 
partnership  including  national  and  regional  administrations  and  social  partners.  Measures 
supporting  the  young  and  counteracting  early  school  leaving  are  also  implemented  in 
Portugal, with interventions improving recognition of acquired qualifications. In Ireland, the 

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ESF  aims  to  encourage  lifelong  learning  among  unemployed,  unqualified  young  people  or 
early school leavers by integrating them into further education and training. Similarly, Greece 
implements a special programme for upgrading skills offered to young early school leavers. 

(c) Increasing access to employment 

Helping the most vulnerable. The ESF should strengthen the employability of those furthest 
away  from  the  labour  market  (including  long-term  unemployed,  immigrants,  disabled, 
minorities) and support people on precarious contracts. The ESF can offer a combination of 
activation measures such as improvement of work-related skills and incentives for companies 
to  employ  disadvantaged  workers  or  to  offer  them  internships.  Social  services  can  also  be 
targeted by reinforcing measures to provide more services of better quality. ESF funding can 
also  focus  on  strengthening  co-operation  between  employment  services,  social  services  and 
social partners. Adaptation of internal processes and of working arrangements to address the 
needs of specific groups of workers (such as older or disabled workers) can also be supported. 
These  actions  are  essential  to  effectively  support  vulnerable  groups,  and  to  respond  to  the 
long-term challenge of the inevitable demographic decline in most Member States.  

Examples of ESF interventions: 

The  promotion  of  new  employment  opportunities  for  vulnerable  groups  is  already  an 
important  ESF  priority  in  a  number  of  Member  States,  including  the  UK,  Ireland,  Estonia, 
Austria,  Belgium,  Germany  and  France.  In  Cyprus,  actions  include  grants  for  enterprises  to 
employ  persons  belonging  to  vulnerable  population  groups  with  simultaneous  measures 
enhancing  their  employability.  Similarly,  the  ESF  in  Slovenia  provides  subsidies  for 
enterprises  employing  vulnerable  groups  for  1  or  2  years  and  programmes  for  long-term 
unemployed  in  the  non-profit  sector  (training  for  a  specific  working  place  and  subsidised 
employment  in  the  later  phase).  Hungary  introduced  targeted  contribution  allowances  to 
promote the employment of disadvantaged groups, such as older workers, the low-skilled and 
women returning from maternity leave, and plans to broaden the scheme to those who have 
been  made  redundant  due  to  the  crisis.  ESF  interventions  in  Sweden  address  labour  supply 
issues with measures targeting the long-term unemployed, people returning from sick leave, 
the young and people with a migrant background to increase their labour market participation. 
In  Spain  actions  target  those  at  risk  of  discrimination,  including  schemes  for  the  most 
deprived  neighbourhoods.  Interventions  in  the  Czech  Republic  pay  a  particular  attention  to 
minorities  like  the  Roma.  UK  support  for  the  newly  unemployment  and  for  those  at  risk  of 
redundancy  includes  specialised  motivation  and  job  search  schemes  for  those  who  suffer 
significant  barriers  to  enter  labour  market.  Portugal  introduced  exceptional  measures  to 
support fixed term recruitment of unemployed over 55 years and the most disadvantaged. 

Strengthening  Public  Employment  Services  (PES)  for  timely  assistance.  With  the 
mounting  job  losses,  strengthening  the  capacity  of  PES  must  be  at  the  heart  of  ESF 
interventions. Services must be of high quality and target all groups of clients including those 
who used to have low unemployment rates such as high-skilled workers in the service sector. 
ESF  support  can  increase  the  provision  of  these  services  and  support  development  of  new 
tools.  Supporting  the  capacity  of  PES  can  include  training  for  the  staff  of  PES,  including 
career and guidance professionals, to improve matching and mobility.  

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Examples of ESF interventions: 

The ESF already has a long tradition in supporting the modernisation of PES. Intensification 
of such measures can be observed in some Member States e.g. in Lithuania, Poland, Slovenia 
and the UK. The UK is stimulating co-operation of public services with other partners such as 
skills  agencies.  Poland  supports  PES  through  measures  ranging  from  designing  new 
instruments to reinforcing the capacity of staff, and is developing a quick reaction mechanism.  

Public-private partnerships to strengthen the social economy and social innovation. The 
ESF  should  support  the  development  of  effective  public-private  partnerships,  bringing 
together  all  stakeholders  including  social  partners,  public  and  private  employment  services, 
social services, public administrations, civil and professional society representatives, training 
and  education  institutions.  The  contribution  of  the  ESF  to  build  and  develop  partnership 
approaches  across  Europe  is  well  acknowledged.  Now  it  is  time  to  capitalise  on  this 
experience and take it to a next stage by mobilising all actors to agree and act on commonly 
agreed  objectives.  The  aim  should  be  to  develop  high  quality  rapid  reaction  schemes,  with 
clear  rights  and  obligations  for  all  partners  spelled-out  whatever  appropriate  in  territorial  or 
sectoral  pacts  for  employment.  Joint  work  to  develop  new  approaches  gives  grounds  for 
developing social innovation.  

Examples of ESF interventions: 

In Austria local employment offices, regional governments and social partners work together 
in  the  framework  of  'Territorial  Employment  Pacts',  where  they  jointly  develop  new 
approaches to reach out to groups furthest from the labour market. In the UK, the ESF will 
support co-operation between private and public institutions providing employment and skills 
up-grading services. Improving co-ordination between all actors involved in social inclusion 
measures  such  as  national  and  regional  authorities  and  third  sector  entities  will  be  further 
reinforced  in  Spain  through  a  creation  of  a  national  network.  In  the  Netherlands  mobility 
centres  are  established  in  regions  with  high  number  of  redundancies  with  local  cooperation 
between employers, trade unions, educational institutions, job centres, chambers of commerce 
and  other  local  partners.  In  Belgium  partnerships  promote  social  inclusion  through  a 
multidimensional  approach  emphasising  not  only  jobs  but  also  healthcare,  accommodation, 
literacy, mental health and cultural differences.  

Supporting social partners  

*** 

Successful implementation of actions under the rapid recovery packages largely depends on 
the involvement of social partners. To play their pivotal role social partners should make full 
use of the EUR 1.2 billion allocation foreseen in the least developed regions for strengthening 
their capacity and to undertake joint actions. These resources might be particularly useful to 
support the creation of sector partnerships aiming to support the restructuring and adaptation 
process in particular sectors.  

Monitoring progress 

In  partnership  with  Member  States,  the  Commission  will  monitor  progress  made  and  the 
impact  of  the  rapid  reaction  packages  but  also  to  promptly  react  to  any  problems  and 

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difficulties which might occur. Exchange of experiences between Members States and regions 
should help identify best practices and adopt new approaches.  

The  ESF  annual  reporting  system  will  provide  the  basis  to  continually  monitor  the 
implementation  of  the  rapid  reaction  packages.  The  strategic  reporting  will  allow  an 
assessment of the effects of ESF rapid recovery packages. On this basis, the Commission will 
present in the 2010 report its reflection on the implementation of the ESF anti-crisis measures 
for  the  attention  of  the  Council,  the  European  Parliament,  the  Economic  and  Social 
Committee and the Committee of Regions. 

*** 

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