THE STATE OF THE EUROPEAN UNION REPORT. Europe in a period of transition

SOCIAL EUROPE IN ACTION: A NEW IMPORTANCE IN THE PANDEMIC AFTER A LOST DECADE 75 cent). Following a decline in the fourth quarter of 2020, it increased again by February 2021 before falling again to 7.3 percent in the EU and 7.9 percent in the euro area. A sharper increase was recorded for youth unemployment, which rose from 14.8 percent in the EU (euro area: 15.5 percent) in the fourth quarter of 2019 to 18.4 percent (EU) or 19.1 percent (euro area) in the third quarter of 2020. In May 2021, it was still at just over 17 percent in both the EU and the euro area. In 2020, Estonia (9.6 percentage points to 18.9 percent) and Spain (8.6 per- centage points to 39.9 percent) recorded the biggest increases (European Commission, 2021b). Women were affected by unemployment to a slightly greater degree than men as a result of the crisis. Thanks to numerous short-time work schemes, which the EU began running in May 2020 on the basis of a new European instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE), the rise in unemployment seems to be moderate relative to the economic downturn. Nevertheless, the unemployment figure of 15.3 million (euro area: 12.8 million), inclu- ding 3 million young people (euro area: 2.4 million) in May 2021 shows just one part of the full extent of the effects of the crisis on employment. It should be noted, for example, that school closures, resulting in additional childcare and home schooling needs, may have led to an increased lack of availability on the labour market. Others will have discontinued their search for new employment in view of the temporary collapse in hiring opportuni- ties. Accordingly, the share of people aged between 15 and 74 in the EU who were part of the working popula- tion base but were not actively seeking work, increased sharply: from 3 percent in the fourth quarter of 2019 to 4.9 percent in the second quarter of 2020, subsequently falling back to 3.7 percent in the fourth quarter of 2020. Furthermore, the rate of 15- to 29-year-olds who were not in employment, education or training (NEET) rose sharply in almost all Member States, and particularly in Lithuania, Malta and Spain, during the crisis. The NEET rate was particularly high in Italy (22.7 percent), Greece (19.0 percent) and Spain (18.2 percent). The unemployment rate also differed considerably among the Member States: compared to 2019, it increa- sed in 2020, particularly in the Baltic States, Sweden and Spain (the frontrunner in this regard was Estonia with an increase of 2.4 percentage points); in other Member Sta- tes, in contrast, unemployment actually fell significantly (Greece -1.0 percentage points, Italy -0.8 percentage points). In 2020, the Member States with the highest above-average unemployment rates (EU average: 7.0 percent) were Greece (16.3 percent), Spain (15.5 per- cent) and Italy (9.2 percent). Unemployment was lowest in 2020 in Czechia (2.6 percent), Poland (3.2 percent), the Netherlands and Germany (both 3.8 percent). In 2020, the median income earned by the working population before social transfers fell by approximately 7 percent compared to 2019, and in half the Member States, low earners had to cope with losses that were three to four times higher than those suffered by top ear- ners. It was possible to reduce income losses significantly through automatic stabilisers and short-time allowances. At EU level, therefore, available household income and the at risk of poverty rate remained stable compared to 2019. However, there were significant variations in regional distribution. Income losses were highest, even after social transfers, in Croatia, Cyprus and Greece.There was a significant rise in the risk of poverty in Portugal, Greece, Spain, Italy, Ireland, Slovenia, Bulgaria, Austria and Sweden. Fundamental change of direction: fighting the pandemic The various regional and target group-specific effects of the crisis confronted the EU with the challenge of responding appropriately. On the one hand, it must be remembered that individual states – such as Italy and Spain – even before the start of the pandemic had been suffering the after-effects of the crisis in the euro area and the austerity measures taken to manage that crisis. They had not yet been able to reach their pre-crisis le-