Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Seasonal workers from Romania harvest asparagus in a field on March 26, 2020, near Luckenwalde, Germany.

Sean Gallup/Getty Images

The European Union executive proposed on Wednesday a wage-subsidy scheme to encourage employers to cut workers’ hours rather than their jobs amid the coronavirus pandemic, a plan that could be worth €100-billion in borrowing guaranteed by all EU countries.

The proposal might find favour in Italy, Spain, France and other countries, which last week demanded a common debt instrument issued by an EU institution to fight the economic downturn.

Faced with strong opposition from Germany, the Netherlands, Finland and Austria, which oppose joint debt issuance, EU leaders asked their finance ministers to come up with workable proposals by next week.

Story continues below advertisement

European Commission head Ursula von der Leyen said the short work week initiative, modelled on the successful German Kurzarbeit scheme, “is intended to help Italy, Spain and all other countries that have been hard hit.”

“Companies are paying salaries to their employees, even if, right now, they are not making money. Europe is now coming to their support,” she said.

“If ... companies run out of work because of a temporary external shock like [coronavirus], they should not lay off their workers.”

Ms. von der Leyen did not give financing details, which are only to be released on Thursday, but a senior EU official said the size of the plan could be €100-billion ($155-billion).

“The EU would borrow against guarantees given by member states. It is about ensuring that all EU countries can have it and ease pressure on workers,” the official said.

Under the German scheme, the government pays part of a worker’s wages whose hours are shortened during a slowdown. This preserves jobs and spending power so that recovery from a slowdown is faster and easier.

Other options under consideration are a credit line from the euro zone’s bailout fund, more lending from the European Investment Bank and the use of the bloc’s joint long-term budget either directly or for guarantees for leveraged borrowing.

Story continues below advertisement

The commission has already relaxed curbs on state aid and is allowing states to spend freely to shield their economies.

National EU envoys debating the package on Wednesday said the 27 leaders should only meet again once the ministers have found common ground.

“We don’t want to see a repetition of heated discussions,” one senior EU diplomat told the closed-door meeting, according to diplomatic sources briefed on it.

EU unity has already been tested by the pandemic, with governments squabbling over medical equipment and emergency checks on what are normally Europe’s open internal borders.

The next long-term EU budget, which member states have yet to agree on, starts in 2021 and runs until 2027. The commission is working on a coronavirus update of an earlier draft, which would be worth just above 1 per cent of the bloc’s gross national income, or about €1-trillion.

Given the uncertainty over how deep the disease-induced economic slump would be, the EU ambassadors on Wednesday considered fleshing out a shorter, emergency budget for a year or two instead.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies