Unemployment in the European Union ticked up in April as job losses tied to the coronavirus pandemic mounted. But short-time work programs — which are far more common than in the United States — helped cushion the blow.
The EU unemployment rate rose to 6.6% in April from 6.4% in March, Eurostat, the statistical office of the European Union, said Wednesday.
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Job losses were not spread evenly across all EU countries. The unemployment rate in Spain, which was hit hard by the coronavirus, increased to 14.8% from 14.2% the previous month. Germany, meanwhile, held its unemployment rate steady at 3.5%, according to Eurostat.
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Still, the data indicates that Europe has been able to keep a lid on unemployment while battling its worst economic crisis since the 1930s. The European Commission predicts that GDP in the 19 countries that use the euro will contract by 7.75% this year, a record.
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Economists partially credit the widespread reliance on short-time work programs, which encourage struggling companies to retain employees but reduce their working hours. The state then subsidizes a portion of their pay. In Germany, for example, the government covers between 60% and 67% of pay for hours not worked.
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Article URL : https://edition.cnn.com/2020/06/03/business/europe-unemployment-coronavirus/index.html