EU proposes short-time work scheme to avoid coronavirus lay-offs

• If there are no orders and companies run out of work because of a temporary external shock like corona, they should not lay off their workers.
• Companies are paying salaries to their employees, even if, right now, they are not making money. Europe is now coming to their support, with a new initiative.

BRUSSELS: The European Commision proposed a short-time work scheme on Wednesday modelled on Germany's Kurzarbeit programme to help people keep their jobs as the coronavirus pandemic hits economies across the 27-nation bloc.

Announcing the scheme by video message, Commission head Ursula von der Leyen did not give details on how it would be funded, saying only it would be guaranteed by all EU countries -a clue that it could be linked to the EU budget.

"Companies are paying salaries to their employees, even if, right now, they are not making money. Europe is now coming to their support, with a new initiative," von der Leyen said.

"It is intended to help Italy, Spain and all other countries that have been hard hit. And it will do so thanks to the solidarity of other member states," she said.

Under the long-standing German scheme, the government pays part of a worker's wages when companies cut their hours in the face of a slowdown to prevent them losing their jobs altogether.

The Commission said more details of its plans would be available on Thursday.

"If there are no orders and companies run out of work because of a temporary external shock like corona, they should not lay off their workers," von der Leyen said.

"This way, people are spared the hole in their wallets during the crisis. They can continue to pay their rents and buy what they need. And this also has a positive impact on the economy," she said.