ECONOMY

Schemes aim to support the labor force

schemes-aim-to-support-the-labor-force

As part of efforts to boost businesses, which have already taken a strong hit from the coronavirus pandemic, while also helping the unemployed, whose numbers are expected to rise amid the new crisis, the government is planning to partially subsidize wages lost by employees whose full-time contracts have been reduced to part-time while introducing a coupon scheme as a cash incentive for employers to hire unemployed workers. 

As regards cases of employees who have been obliged by struggling businesses to work part-time, a practice widely known by the German term Kurzarbeit, the government’s plan foresees the state covering up to 60 percent of the wages that the worker has lost in the transition from full-time employment to part-time. A ceiling will be set for that subsidy. 

It remains to be seen how many sectors the Kurzarbeit subsidy scheme will be applied across and for how long.

This will depend on the fiscal scope that the Greek state budget allows, along with the extent of aid that Athens is able to secure from the European Union’s Support to mitigate Unemployment Risks in an Emergency (SURE) fund. 

Another initiative aimed at supporting the labor force is a voucher scheme for the unemployed. Under this scheme, the state would give coupons to the unemployed which businesses would be able to cash when hiring them.

The amount of cash linked to each coupon has not been determined but the idea is to offer businesses a financial incentive to help reduce jobless numbers which have steadily risen since the onset of the pandemic.

Another possibility being considered is for the state to cover those new employees’ social security contributions for a certain period of time. 

The proposed schemes are being carefully considered by government officials amid concerns that they could be exploited by fraudsters declaring bogus hirings to pocket state subsidies. 

Prime Minister Kyriakos Mitsotakis and Finance Minister Christos Staikouras on Friday discussed the government’s planned measures to support particular sectors of the Greek economy that have been hit particularly hard by the repercussions of the Covid-19 pandemic with a particular focus on tourism, restaurants and bars and culture.