Macroeconomic recovery now requires solidarity.

IF – 09/2020

It is inevitable that the European Union will face a major economic slowdown due to the COVID-19 pandemic. The actual impact on Member States cannot yet be estimated in monetary terms. In order to prevent a deep-seated social emergency in the euro zone, a social policy that gives people security is necessary in addition to economic development.

Especially in the area of the future of work, the pandemic will change more in the world of work than was thought in recent years. Employers and employees alike are confronted with new forms of work and emerging fears about the future are omnipresent. Politicians are trying to find quick-fix solutions to minimise the increased pressure on the world of work.

New world of work with a European minimum wage?

Making work more flexible requires a great deal of perseverance and energy from both employers and employees alike. There must be a guarantee that as many jobs as possible will be secured for the future and a binding prospect of adequate and reliable remuneration. The debate on a European minimum wage will intensify in autumn following the conclusion of the consultation phase of the social partners at beginning of September.

The next steps are either fast-track negotiations between the social partners with a view to concluding an agreement on the Treaty on the Functioning of the European Union (TFEU) under Article 155 or the submission of a proposal by the European Commission. The Commission’s proposal could be published by the end of October. Italy, Spain and Portugal are already advocating an EU initiative on a minimum wage framework. It is now up to Germany, the current Council Presidency holder, to get the debate going among the 27 Member States.

The will to rebuild

Increasingly, employees are required to adapt to new circumstances and keep pace with the constantly changing work environment. That is why politics must also respond quickly to ensure the reconstruction of the European economy on the one hand and not to overburden the citizens on the other.

As a matter of course, Nicolas Schmit, the Commissioner for Jobs and Social Rights, is given an important role in the Panel of the European Commission. He acts as the linchpin to ensure that social issues are addressed in depth in all policy areas. Schmit reaffirms time and again that a future for Europe cannot be developed with low pay or insecure jobs. A successful economic policy is now needed to prevent a longterm social crisis in the European Union.

A question of money

Reaching agreement between the institutions on the Commission's EUR 750 billion recovery fund is high on the agenda of unresolved issues. The EU Parliament wants to make considerable improvements. Despite the efforts of the EU Member States to support their economies, in these uncertain times, it is not advisable to rely solely on national plans. What is needed is a common European approach in which no one feels cheated or exploited. These fears are not appropriate at this stage of the crisis.

European investment means investment in the future of Europe. More than ever, the focus must be on the common European idea. Autumn will be an exciting political season and Germany's role as a mediator is more in demand than ever.