Analysts see 9 mln “zombie” jobs in Europe

The analysis of Euler Hermes and Allianz shows that, in Europe, unlike the US, widespread job preservation programs have helped prevent mass unemployment in the short term. Nearly a third of Europe's workforce or 45 million jobs in the five largest economies currently benefit from national employment support programs. The success of the German Kurzarbeit during the Great Financial Crisis certainly prompted many European governments to adopt short-time working arrangements to alleviate the Covid-19-related impact on labor markets. Companies could reduce employees' working hours, with the government covering a large portion of lost income (from 60-100 percent).

Despite the extraordinary support measures, economists Allianz and Euler Hermes expect, in 2020, 4.3 million additional unemployed in only the five largest European economies.

Economists of Allianz and Euler Hermes estimate that in the five largest European countries, 9 million employees or 20 percent of those currently participating in short-time programs will face an increased risk of losing their jobs in 2021 due to moderate recovery and the effect political cliff.

"We called them zombies' jobs (or 'ghosts '– seemingly normal employment prospects) because they require ad hoc policies to avoid delayed mass unemployment,' analysts noted.

(WBJ)