In a matter of a few weeks, the political challenges facing Europe have changed dramatically, with the unfolding health and economic crisis. In the previous economic turmoil, our collective response was to weaken the rights of the worker. This time it must be different, argue Danish MEPs Marianne Vind, Nikolaj Villumsen and Kira Marie Peter-Hansen.
Marianne Vind is an MEP for S&D. Nikolaj Villumsen (GUE/NGL) is the EMPL Committee coordinator. Kira Marie Peter-Hansen is a Green MEP and EMPL coordinator.
The extraordinary crisis of COVID-19 has exposed Europeans to a health threat unlike any we have experienced in a lifetime, fully warranting a lockdown of our European economies. As a result, however, we are now also facing a crisis of unemployment as workers experience mass layoffs, pay cuts and deterioration of their working conditions.
While the COVID-19 health crisis is the first of its kind to hit the EU, the economic predicament is not. We can and must draw on lessons from recent economic crises to understand how to respond – and most importantly how not to.
The current economic crisis has sparked mass unemployment. Millions of Europeans have been laid off from their work creating uncertainty about their future income. In Spain, more than 800.000 workers have lost their jobs and in France, more than four million have asked for unemployment benefits according to the Financial Times.
Ten years ago when Europe was facing an economic crisis and surging unemployment rates, the brunt of the burden was born by the average European worker.
Collective bargaining was seen as an obstacle to a restrictive wage policy and social dialogue was as such put under pressure. This time our response must be different.
This time national governments and the European Union must choose to strengthen social partners and involve them in the crisis management and recovery of our economy. The social partners know best what the challenges and needs are at production facilities and workplaces around Europe.
With close contacts to workers and employers and with deep knowledge of their national labour markets, unions and employers organisations are the experts we need to craft responsible and just responses to our current crisis.
This is what the Danish government did.
On March 13th, the government and the social partners concluded a tripartite agreement in just 24 hours to avoid mass layoffs while safeguarding the health of the citizens. The three parties agreed to share the burden of the lockdown as employees were sent home and businesses shut.
The government agreed to cover between 75 and 90% of workers’ wages, workers would take five days of leave and the employers agreed to pay the remainder of the wages. In return, none of the workers would be laid off for three months.
This tripartite agreement has already benefited thousands of workers who would otherwise have been laid off.
For example, Scandinavian Airlines was able to send home 4,000 of its workers with full pay. Copenhagen Airport was able to do the same for 1,500 of its workers.
More than 25,000 other companies have now applied to the program to avoid layoffs. This enables companies to keep their workers on staff so that they are able to come back to work quickly once our society can be reopened.
At the same time, it keeps workers from going unemployed and provides financial security in uncertain times, which will hopefully keep up spending and economic activity.
In other words: the Danish example has proven the strength and relevance of inviting social partners to share the burden. And this is not the first time.
Denmark has a long-standing tradition of inviting social partners to the table to solve the challenges that are too big for any government to take on by themselves, whether that be life-long learning, immigrant integration or a nationwide shutdown.
In turn, this has ensured our ability to transition swiftly in times of crisis and make long-term social gains in times of stability
The current crisis highlights the need for national governments to recognise the strength of tripartite agreements. This will not only serve them well in mitigating the consequences of the corona crisis. It will also strengthen the rights and the welfare of their workers and help businesses recover and grow again.
The Commission must support these efforts. We need a framework to strengthen the social partners and their ability to bargain collectively. As a very first step, the EU should introduce social clauses in public procurement legislation to fight unjustifiable working conditions in Europe.
This would be a step forward to enable strong partners on the labour markets, creating a solid foundation for our European economies to respond to rapidly changing labour markets – in crises and in health.