SPERLONGA, Italy (AP) – Europe has limited the rise in unemployment caused by the pandemic with a wide range of government support programs, but this cannot hide the widespread economic distress and anxiety among workers and workers. small business owners.
First, the good news: the unemployment rate in the 19 countries that use the euro rose only slightly in May, to 7.4% from 7.3% in April, according to official figures on Thursday. Governments have used labor market support programs to lessen the impact of the virus epidemic on workers. In comparison, the American unemployment rate reached 13.3%.
European governments pay part of workers’ wages in exchange for companies that do not fire them. Governments have also rolled out a range of loan programs and other assistance to employers like Marco Chinappi, whose family runs the three-star Mayor hotel in Sperlonga, an Italian seaside town on the coast of Rome.
He was able to benefit from a state guaranteed bank loan of 25,000 euros ($ 28,000) at a low interest rate as well as measures to defer the payment of certain taxes. This helped him to re-hire his two seasonal workers, who each receive 600 euros in government support.
“With much difficulty, two months of work, I obtained the loan guaranteed by the government. Fortunately, because we were really in crisis, “he said. “We had no money.”
Chinappi said he was still unsure whether the aid would keep business afloat, given that the hotel was already experiencing financial difficulties and guests were only starting to “shyly” book rooms that would normally have been filled at this day.
Gianni Cammisola, who sells cured meats, locally made quiches and Spanish ham imported into the same city, also counted on the government loan to maintain his family business.
“I have a wife, two children and I earn less this year. The 25,000 (euros) will allow me to feed the children, especially if we have another lock, ”he said. Cammisola estimates that he lost 15,000 euros during the forced closure, which coincided with the start of the peak tourist season in the days around Easter and two major holidays on April 25 and May 1.
But he knows that Sperlonga is lucky, as he usually caters to Roman and Neapolitan tourists, and said that the recent holiday weekend of June 29 was full.
“We lost April and May. But last weekend, it was like Ferragosto, “he said, referring to the August 15 vacation that marked the peak of the Italian summer tourist season. “Thank God,” he said, making the sign of the cross in the middle of his salamis.
Government support programs are used across Europe to contain a spike in unemployment. In Germany, the leading economy in the euro zone, 6.7 million people still benefited from wage support programs in June. The program pays at least 60% of the missing wages when workers are put on shorter hours or no hours.
Government support for wages is given because companies are not responsible for economic problems – countries around the world have had to limit business, travel and public life to limit the spread of the coronavirus. The idea is to support the recovery because companies will not have to recruit and train new workers, having kept their staff.
Another less positive factor limiting unemployment is that people have left the workforce and are no longer looking for work. This could be due to the fact that they are limited by containment measures, or because they have to take care of their children who are not in school or daycare because of the closings.
Eurostat estimated that 12.1 million people were unemployed in countries that use the euro. The agency said that to fully grasp the unprecedented labor market situation, its next quarterly labor survey to be released on July 9 would contain additional information on underemployment and labor market dropouts.
The European Commission says that the 19 countries that use the euro will see their economies shrink by 7.75% this year.
Source: AP News