william De Vijlder

 

The labour market is a key barometer for assessing the health of an economy. Judging by the increase in the unemployment rates in 2020, 7,5% at the end of 2019 to 7.8%, it goes without saying that the health of the Eurozone economy has deteriorated in 2020 owing to the very severe recession that was caused by the pandemic. The consequence was that, according to the calculations of the European Commission, about three million people lost their jobs. On the other hand, the increase in unemployment was less severe that what we have seen during the Great Recession in 2008-2009 and that is the reflection of the support measures that have been put in place by the different governments in terms of short-term work. For the remainder of the year, the probability seems quite high that unemployment will increase further. One possible cause will be the ending of short-term work programmes that could force companies to cancel jobs because they would not have yet a high enough level of profitability to hold on the jobs. The second reason would be that the bankruptcies would rise. That is a major concern we have in Europe. Against that very much depends on whether certain measures that have been taken in the course of 2020 will be maintained or not and it also depends on the speed of the recovery. A third reason could be that companies would decide to cut costs further to enhance their profitability and cutting costs could encompass shedding jobs…