Debate: Social and employment crisis in the COVID- pandemic and the EU's response in the Recovery Plan and the MFF
Date: WEDNESDAY, 20 JANUARY 2021
Speaker: Nicolas Schmit
Language: EN

The Commission has indicated that our objective should be 70% of people vaccinated at the beginning of, or at least within, the next six or seven months. The second road to recovery is to maintain our strong will to contain the economic and social effects of the crisis thanks to the unprecedented efforts of the EU and the Member States.  As already described by the President, it is true that economic activity has been strongly impacted over the past year. And the outlook for 2021 remains uncertain because we do not know exactly what the evolution of the pandemic will be; thus the importance of vaccination.  The unemployment rate has increased – though it has increased less than one could have feared – and this is because Member States reacted, reacted through the introduction of massive short-time work schemes, with the support of the European Union. But the statistics do not tell us the whole story, yet millions of people have lost already their jobs and they are mainly the low-skilled, the low-paid workers, the temporary workers, the young on precarious work, and the most vulnerable. Precisely the most vulnerable people have been disproportionately hit, and after a clear improvement, poverty and inequalities are again on the rise. Moreover, the recovery will likely be uneven across Member States, across regions, across economic sectors and categories of workers. Therefore, we need a strong solidarity at all levels – at national levels, at regional levels, and, obviously, also at European level.  The EU support is all the more important to ensure a sustainable and inclusive recovery and economic and social upward convergence. The EU has been reactive and played a leading role to mitigate the negative effects of the crisis. The EU launched an unprecedented plan for reform and investment worth almost EUR 1.8 trillion, made up of long-term investments, financed by the Multiannual Financial Framework, more than one trillion, and one other financial instrument, the Next Generation EU with EUR 750 billion. The Recovery and Resilience Facility will fund reforms, as the President has just mentioned, on the one hand, and investments in every Member States. We have to build back better, and here investments are extremely important. We have to support growth and employment while boosting the green and digital transitions. We are not talking about any growth: we want sustainable growth and we want an inclusive growth. Cohesion funds have been boosted through the REACT-EU initiative, increasing the resources of the current programmes to address the social and economic impact of the crisis. The European instrument for temporary support to mitigate unemployment risks in an emergency, better known as SURE, has helped and is still helping Member States fund their short-time work schemes and similar schemes for the self-employed to mitigate the immediate economic impacts of the pandemic and the necessary confinement measures. In addition, euro area Member States agreed to make available a combined volume of around EUR 240 billion to help finance health-care, cure and prevention costs due to COVID-19 through the European Stability Mechanism.  Yet a surge in unemployment may have only been delayed rather than averted. That’s what I meant when I said ‘statistics do not tell us the whole truth’. High risks affecting the labour market exist as many sectors are unlikely to fully recover for some time, and many companies are already experiencing financial distress. While short-time work schemes have been effective in cushioning the blow and continue to be an important element of support at this critical juncture of the pandemic, they cannot be a durable solution, although we have to maintain them where necessary and combined, if possible, also with training and with skilling people in order to offer them new jobs. We need to set the conditions for future sustainable economic growth and a quality job-rich recovery. Investments, reforms, active labour market policies and skills for jobs are key.  We need a coherent package of active labour-market measures to support structural change and quality job creation by easing business restructuring where needed and facilitating the redeployment of labour, notably towards the green and digital economy, and that’s what the President of the Commission, Ms von der Leyen, said this morning. Yes, jobs, jobs, jobs, is key, but we do not want precarious jobs, especially not for the young. We want quality jobs.  The modernisation of labour market institutions, promotion of upskilling and re-skilling and reinforcement of social protection and health systems will be crucial to strengthen economic and social resilience and secure growth and employment in Europe, also in the medium and long term. This is all the more important as we see that some groups are hit especially hard. We must avert at all costs the risk of a new ‘lost generation’. Years of progress in bringing down youth unemployment risk being compromised, in particular with a view to those furthest from the labour market. Therefore, it’s now important to implement the Youth Employment Support (YES) programme that the Commission launched in July already and to translate it in concrete actions and also to integrate it in the measures financed by the recovery and resilience plans. Workers in non-standard forms of employment, above all temporary employees, are particularly vulnerable. Women are over-represented in sectors that are at the forefront of fighting the pandemic. Women are also particularly affected by the increase in unpaid care and domestic work. Equality, therefore, remains high on our agenda, not just for pay, but also for all the opportunities in the economy and therefore will have also, especially in the care sector, where three quarters of workers are women. We have to value this work in terms of recognition but also financial recognition. Children in low-income families are also at risk, in particular as distance learning has become a norm for many pupils. It really matters whether you have access to a computer, a good internet connection, a quiet place to study, and parents who are able to support you. There is a new ground for inequality, for inequality of opportunities that we really have to tackle. In general, health, education and social-protection systems, in particular social services, have been put under unprecedented pressure, further exacerbating challenges for people in the most vulnerable situations. This will continue to stress test the capacity of social protection. And finally, this is part of the resilience we have to strengthen. We have to do that in relation to adequacy, coverage and sustainability. This has come to the fore in view of ensuring socially fair transitions. Our action plan to further implement the European pillar of social rights is imminent. It will turn the pillar’s principles into concrete action for recovery and renewed upwards convergence in the EU. This will include an update of the pillar’s social scoreboard in a long-term view up to 2030. Many measures, from boosting skills to reforms to strengthening social protection systems, to investments in social housing, for children in need can be supported through the new funding instruments established on the Next Generation EU and the MFF. The European Parliament and the Commission have been able to strengthen the social dimension of the Recovery and Resilience Facility even further, and I’m more than grateful for that work which has been done in Parliament. The Cohesion Policy, including the ESF+ and the Just Transition Fund, will also play a critical role in supporting economic recovery, and the European Globalisation Adjustment Fund for displaced workers can support workers who have lost their job due to restructuring.  This shows that we have formidable firepower, financially but also the tools, to turn the present challenges into opportunities. While building back our economies and societies, by boosting the green and digital transition, we need to set the conditions for achieving social progress. This is imperative for successful, fair, sustainable and inclusive recovery, and we will all meet in Porto to make these objectives very concrete.