Urgently prepare the European unemployment benefit systems to face the unemployment explosion

Despite the conservative estimates made by the Member States and the European Commission, which a couple of months ago were still denying the existence of the crisis itself, Newropeans is now convinced that unemployment within the EU will reach historical levels in the course of the years 2009/2010. Over this period, one should expect almost a doubling of the number of unemployed, up to approx. 30 million people (versus 17 today), under the combined effect of bankruptcies, redundancy plans and the recruitment stop . the various revival plans currently announced that continue to ignore the systemic nature of the crisis will not have a significant impact on this trend.

Against this background, even before the complex implementation of the employment reconstruction process, and because of the possible duration of the most severe phase of the crisis (between two and three years), Newropeans asks all Member states to prepare as soon as possible, already at the beginning of 2009, an urgent reform of the unemployment benefit systems in order to face this two fold increase:

• the increase in the number of unemployed
• the increase in the average duration of unemployment.

Instead of focusing the provision of public funding to financial institutions, and awaiting the necessarily long term impact of large public investment plans revival measures, it is essential that Member States avoid an explosion of their unemployment benefit systems for lack of budget.. And it is also vital to avoid that in on year from now million of unemployed reach the end of their benefits, et because of a lack of dynamic labor market sink into absolute poverty.

Avoid at all costs the transformation of the economic crisis into a major social crisis

The existence of a social system based on solidarity in the European states is a major advantage which benefits our continent to face the crisis. Since they don’t benefit from an similar ‘social safety net’ Asian countries are now worrying about increasing riot risks and violent socio-political movements; whereas the United States, powerless, see a growing part of their middle class sink into poverty. Europe, by opposition, has the advantage of having learnt from the 30’s crisis and of having generalized the principle of social protection. For the next three years, this social protection will become the best protection of our society’s stability and of our democracies. The EU Member States therefore need to reinforce it. .

Brussels - More jobs will be lost in Europe before the economy recovers, the European Commission said Monday as it published forecasts pointing to a contraction in gross domestic product of 4 per cent in 2009.

"The situation has improved ... but the weak economy will continue to take its toll on jobs and public finances," said Joaquin Almunia,the European Union's economic and monetary affairs commissioner, as he presented updated forecasts for the current year.

The European Commission's latest forecasts point to marked improvements in the EU's largest economies in the second half of the year. But the overall GDP figure of -4 per cent is unchanged on its spring forecast because the start of the year was worse than expected.

The economy of Europe's locomotive, Germany, is now expected to grow by 0.7 per cent in the third quarter and by 0.1 per cent in the final three months of the year. This results in a revised overall forecast of -5.1 per cent, compared with previous forecasts of -5.4 per cent.

France, Italy and Britain are also seen posting positive growth rates in the second half of 2009, while Spain's recession is set to extend into the new year.

"The global economy is no longer in freefall" and recent economic figures are "encouraging", the commission said.

But while there are reasons to be "moderately optimistic", Almunia said EU governments need to "continue implementing the recovery measures announced for this year and 2010."

The EU's unemployment rate rose to a four-year high of 9.0 per cent over the summer, but officials in Brussels expect it to hit at least 9.4 per cent by the end of the year. (dpa)