FRANKFURT/HAMBURG (REUTERS) - A tried-and-tested German model of sending workers home in exchange for job guarantees during downturns could help the European Union limit the damage from the coronavirus pandemic.. Read more at straitstimes.com.
FRANKFURT/HAMBURG - A tried-and-tested German model of sending workers home in exchange for job guarantees during downturns could help the European Union limit the damage from the coronavirus pandemic.
Germany's IG Metall union has already lowered wage demands for 3.8 million metalworkers and company labour representatives began pushing for Kurzarbeit to help slash wage costs. Instead of drawing a full salary, employees will tap a 26 billion euro insurance fund overseen by Germany's Federal Employment Office, which guarantees workers at least 60 per cent of their basic pay or more if companies add their own stipend.
Germany's neighbour, Poland, has a short-work scheme, but critics say it has not been administered efficiently. KEY TO RECOVERY In the longer run, Kurzarbeit subsidies could discourage restructuring of underperforming companies, said Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics."You don't want Kurzarbeit to delay the inevitable and allow a zombie company to survive. It is a fine balance," he said.
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