THE STATE OF THE EUROPEAN UNION. Reforming Europe in a time of war

Social Europe: Retaining the status quo during the pandemic, avoiding new disparities 25 One particularly positive development is that the rates of unemployment and youth unemployment fell in every single Member State. This is especially significant in those states that had already suffered for a long time from the consequences of the euro crisis between 2010 and 2016. While Greece (12.7 percent in April 2022) and Spain (13.1 percent in May 2022) were the only EU countries to post double digits, these are low compared to the previous year (-4.2 percentage points in Greece; -2.3 percentage points in Spain). Even more impressive is the drop in youth unemployment in both countries: down 10.9 percentage points to 36.8 percent in April 2022 in Greece; down 10.5 percentage points to 27.1 percent in Spain in May 2022. In comparison, only Italy, Romania, Slovakia and Sweden still have a youth unemployment rate that accounts for more than 20 percent of its work- ing population between 15 and 24 years. Overall, therefore, the labour market proved to be ex- tremely resilient as it weathered the COVID-19 pandemic. Nevertheless, the crisis affected certain groups more than others: young people, part-time employees, self-employed people, women with children and employees with a low level of education, among them many migrants, were dis- proportionately affected by job losses (European Com- mission, 2021). The decline in youth unemployment was accompanied by a fall in the rate of young people not in employment, education or training (NEET), although this fall took effect very slowly in some Member States. It shows only a muted drop of -1.8 percentage points to 12.1 percent in Q1 2022 compared to the same quarter in the previous year. Nevertheless, it is a step in the right direction. The picture is more negative when it comes to long-term unemployment: at 2.5 percent in the EU in Q1 2022, the rate remained the same as it had been at the start of the pandemic. However, efforts to reduce long- term unemployment are making extremely slow progress. Compared to Q1 2021, the rate fell by only 0.3 percent- age points. This is also due to stagnating or even rising rates in more than a third of Member States. Despite the generally positive trend on the labour market, the increase in inactivity during the pandemic in some sectors and among some groups of employees has led to problems for those wishing to change jobs or return to the workforce. Existing inequalities were ag- gravated as the pandemic accelerated the dichotomy in the labour market: one group has relatively secure jobs and was or is in a position to work from home, whereas another group is in precarious employment and during the crisis had to bear a higher economic and health risk. As positive as the effects of the short-time work schemes were, they nevertheless also reinforced this division, as they were first and foremost aimed at people employed in professions that were not crucial during a pandemic, e.g. traditional office jobs (ETUI/ETUC, 2021: 45ff.). The pandemic has essentially held up a magnifying glass, showing what can be expected on the labour market as the European economic system undergoes two major transformations – digitalisation and decarbonisation. The EU could play a role in the reallocation of jobs to knowledge-intensive and ‘green’ industries and in the provision of support for particularly vulnerable groups in order to prevent the entrenchment of the labour market dichotomy and the resulting inequalities. Protecting vulnerable groups will be a challenge The COVID-19 crisis did in part put an end to the pro- tracted process of overcoming the social upheaval result- ing from the global financial and economic crisis as well as the euro crisis and its management. By the beginning of 2020, improvements could be seen in a whole ar- ray of social indicators. A buoyant labour market, which meant a higher disposable income for many households, was the key factor in this upswing. This subsequently led to a reduction in income inequality, the deprivation rate and the at risk of poverty or social exclusion rate in many Member States, as well as a decrease in the proportion of children at risk of poverty and the work- ing poor. Countries like Greece and Portugal that were particularly impacted by the effects of austerity policies