Shield for 400,000 employees

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At least 400,000 jobs – a sizable section of the local labor market – are expected to be protected until at least March 2021, as the massive submission of applications for cheap state loans in the “Deposit To Be Returned” program is creating a protective shield for the employees of applicant companies.

This measure, combined with the temporary suspension of contracts – which, as Eurostat has also pointed out, considerably reduced the share of workers in Greece that lost their jobs in the second quarter (below 2% against more than 6.5% in Spain) – is raising hopes that although the jobless rate may grow by year-end, at least it won’t soar.

The latest International Monetary Fund report agrees with that, revising its unemployment rate estimate to below 20% – at 18.5% for this year – before easing back to 17.8% in 2021.

The cheap loans program, which forbids layoffs for participating companies, shields workers for the first few months of next year – the period when coronavirus vaccines are expected – and should offer the economy a breather as of the spring. The government expects that more than 400,000 jobs will be preserved this way until at least March 31, while the previous phases of the program have also helped. A fifth phase is also expected in January, extending protection for more positions.

The furlough measure serves as an employment shield too. Payments continue on Wednesday, with the crediting of the accounts of about 2,600 professionals of various categories with the special-purpose compensation. It was announced that the compensation is reverting to 534 euros per 30 days in December.

Of course Greece’s performance in job protection has been accompanied by a dramatic drop in salaries and working hours for more than a quarter of Greek workers.

Additional collateral damage in the battle against the pandemic is that the increased needs in funding the Deposit To Be Returned, whose fourth phase will require more than €2 billion, may lead to possible delays in the state funding of the Single Social Security Entity (EFKA).


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