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

THE UNEVEN IMPACT OF THE PANDEMIC. PROSPECTS FOR A CONVERGENT AND RESILIENT RECOVERY OF THE EU? 83 prior vulnerabilities in the labour markets. Those econ- omies specialising more in activities related to leisure, tourism, the hotel industry, travel, or personal services, which in turn are characterised – generally speaking – by job markets with a greater presence of temporary work- ers, young people, poorly qualified staff, or with lower digital skills, have suffered the most. Along with the differences in the productive structure of the Member States, the pandemic has had a varying impact on people’s health or on the health systems of the various community partners. Likewise, the governments have displayed different degrees of efficiency when it comes to managing the crisis, be it because of the prior state of the public finances or because of the job and social protection systems existing before the pandemic. However, unemployment rates did not reach those reported during the financial crisis, underscoring the success of the temporary job retention schemes and the business liquidity assistance implemented (or strength- ened) in practically all the Member States to prevent the standstill in activity from severing the ties between workers and companies, or from sweeping away sound businesses. According to estimates by the European Commission services, the greatest impact on the rate of unemployment will be felt in 2021, as the assistance is gradually withdrawn. The jobless rate for the EU as a whole will stand at 7.6% and in the euro zone at 8.4%, in both cases 0.9% above the pre-pandemic level. While the impact on the job market, measured in terms of the unemployment rate, may have been partly mitigated, the crisis has brought to light the broad la- bour and social breaches existing both among Member States and within their territories relative to: The lesser participation of women in the job market, the particular impact of unemployment on young people, the precar- iousness associated with excessive temporary employ- ment in certain labour segments, the unequal protection of individual entrepreneurs, or the vulnerability resulting from low skills or poor digitalisation. The emergence from the crisis must be accompa- nied by measures that improve the job prospects of the most vulnerable groups and prevent situations of freak unemployment turning chronic. Moreover, the long-term impact of the crisis on the job market is still uncertain, since it is affected by structural changes related to the ag- ing population or to the rapid digitalisation of economies – some of these have speeded up during the pandemic, such as the growing presence of remote working or the proliferation of new frameworks of labour relations –, all of which has an unpredictable impact on social cohesion or social protection systems (CES, 2021). In short, the crisis caused by the pandemic poses a far from negligible risk of deepening the social differences in the EU. It is likely to halt the progress made in real convergence among the Member States, and not only in terms of GDP per capita, the most orthodox way of aligning it, but also of the difficult achievements in social convergence, since it is seen that they are subject to the economic cycle, with advances in times of prosperity and setbacks in phases of recession (Eurofound, 2019). Crises cause negative divergence, that is to say a deterioration of the indicators and an increase in the disparities among Member States in rates of employment, unemployment, and long-term joblessness, but also in the rates of NEETs (young people not engaged in employment, education, or training), the proportion of people at risk of poverty and social exclusion, or medical needs going uncovered. The EU response: This time it was different It is true that the impact of the pandemic would have been greater had it not been for a series of exceptional measures that were especially robust in the EU, making it clear from the outset that, this time, the response would be different to the one given to the previous crisis and that the lessons of applying austerity measures in a re- cessionary context had been learned. It was evident that a swift and fundamentally budg- etary response to the crisis was required. The community institutions reacted by offering a coordinated framework that gave scope for action to the Member States and