In Spain the number of people infected by COVID 19 is increasing notably; some publications speak of the second phase of the pandemic. There are many workers ending their summer vacations in August and returning to their work centres. Likewise, during the first days of September the school year begins at all educational levels.
CCOO has launched an ambitious Union action plan so that all workers carry out their activity in safe workplaces and do not get COVID19. All CCOO organizations at local and regional level, all sectoral Federations and Union Sections in companies, and all delegates in the workplace are working to ensure that occupational health standards are strictly observed and that strict protocols are implemented to ensure virus-free workplaces.
Working conditions vary in different sectors of activity. In Spain, CCOO and UGT have agreed with the Confederation of Employers a general framework that facilitates dialogue and negotiation in the different sectors. I will hereafter indicate the focus of CCOO’s policies in some sectors, not all, so as not to lengthen this article:
Education: Government and Regional Governments (which are responsible for Primary, Secondary and Higher education) are drawing up plans for the return to classrooms of students and teachers. CCOO’s Teaching Federation has demanded that Regional Governments negotiate to organize educational activities free of COVID for students and teachers, as well as for the rest of the workers. We propose to increase the number of teachers to organize school activities in small groups and within more flexible schedules, as well as protocols in centres to avoid infection. We also want to reach agreements to improve the quality of online education/training. We also propose to improve hygiene at schools with new hires, and provide the centres with nursing services. Today, CCOO has opened negotiations and reached agreements with several regional governments in public education and with various associations of private education employers. In some places there is no negotiation or agreement, which is why we have called various strikes during the month of September, such as in the Madrid region.
Health: The Federation of Health and Social Health Sectors of CCOO is developing a great activity. During the first phase of the pandemic, many health professionals became ill in hospitals, in primary care centres, and in other health related centres. Also in residences of dependents. CCOO is trying to open new negotiations to reach agreements with the different actors: with the Regional Governments that are responsible for public health, but also with the different employers’ associations in private health. Over the past months the Federation has organized numerous training courses for delegates of CCOO in preventing the COVID 19. Despite the risks that health and socio-sanitaryactivities pose during the pandemic, CCOO has developed proposals to reduce such risks: procedures and very strict protocols, protective clothing, periodic PCR tests, more flexible organization of work activities, specific training on COVID19 risks, etc. Recruiting more health workers is a must, both in primary care, in hospitals and in residences for dependent persons, as well as reducing the extremely high temporality that the system currently has.
Industry: CCOO’s IndustryFederation, which groups the Union’s organizations of various sectors: textile, chemical, steel, metal, engineering,…,has started demanding plansto solve the problems that COVID 19 is causing in the workplace. There are tens of thousands of union delegates in companies and thousands of union sections that CCOO has in these sectors. The Federation acts following priority areas: 1. Avoid shutdown of companies and destruction of employment as a result of the economic crisis caused by the pandemic. We demand a more active industrial policy to protect industrial companies, many of which are strategic, and in negotiations with companies we have agreed to use the ERTES (temporary unemployment system) to keep jobs. 2.Improve health conditions in the workplace, since occupational health has to avoid the risks of COVID 19. In most industrial companies CCOO has reached agreements to reinforce health, improve protocols in companies and strengthenhealth services in the workplace. As the law requires companies to agree with Unions on occupational risk prevention plans, we have improved these existing plans with new procedures for the pandemic: PCR test, flexible hours, extreme hygiene, protective clothing and, whenever possible, telework. 3.Maintain an open dialogue with the Government and with business organizations. CCOO and UGT have proposed, together with the employers’ organizations, the extension of the ERTES and we have a negotiation table open to agree on a new regulation on teleworking. Unions have a close position to the Government, but Employer’s organizations intend to use teleworking as a new form of extreme precariousness.
Hospitality and Tourism: these sectors are being hardly affected by the pandemic. The ERTES system is making it possible to maintain employment, but the risks for the future are enormous. CCOO’s primary goal is to maintain employment when the pandemic ends, along with protecting the health of workers. CCOO’s Federation is negotiating specific agreements with the main hotel companies, as well as with business organizations in tourist regions. Digitization is an essential aspect of the future of the tourism sector in some activities, so we are working hard to regulate it in the sector’s collective agreements. The large number of small companies that the bar and restaurant sector has makes Unions’ work very difficult, but in several regions we have reached agreements with the Employment Administration to supervise protocols and working conditions and avoid infections.
CCOO’s Services Federation is acting so that jobs are not destroyed in the commerce sector; we are negotiating with companies to use ERTES while the lack of consumption lasts during the pandemic. CCOO has also reached numerous agreements in large distribution chains to establish new work systems and health protocols in the workplace. Last week, CCOO and UGT signed a new national sectoral agreement for the Contac Centres to improve their working conditions and reduce precariousness. The financial sector is in a process of restructuring. Some banks are merging and reducing branches and jobs. CCOO has reached agreements so that workers are not fired. Furthermore, customer care systems have been established to reduce the risk of infection.
Transport, both public and private companies, is an essential public service. We have proposed the Government the setting up of tripartite tables (Government, Unions and Employers) in the different sectors: rail, air, maritime, and road transport, to maintain jobs in the sector, improve health conditions of workers, and prepare the conditions for future modernization. Legal regulation should serve to reduce precariousness and sectoral Collective Agreements to improve health conditions at work. In large public and private transport companies, CCOO has reached agreements to renew Collective Agreements and establish anti-COVID 19 protocols, but in the road transport sector, due to its high fragmentation in small companies, Union work is turning out to bevery difficult.
Rural workers, mostly seasonal workers in the different agricultural campaigns, many of immigrant origin, are suffering in a special way the contagion of the pandemic due to their extreme conditions of life and work. CCOO’s Farm Workers Federation is negotiating with companies in the sector and with local and regional authorities to improve housing and working conditions to reduce infections. Workers in the meat and processing industries have a similar situation. Although the situation has improved somewhat in recent weeks, people working in these activities are highly vulnerable.
The Federation of Construction, Wood and Cleaning Services of CCOO is developing a wide activity to improve working conditions during the pandemic. Workers in these sectors have to face labour dumping and precariousness. CCOO is reaching agreements to renew sectoral Collective Agreements and improve protocols and work organization to reduce the risks of COVID 19. In large and medium-size companies in the sector, CCOO is reaching agreements to renew Collective Agreements and improve work systems with anti-COVID 19 protocols. But the existence of many small companies that operate in very precarious conditions makes it difficult for CCOO’s protection measures to reach all companies.
2) Ulrich Langhorst, Dortmand City Councillor for theGreen Party reports on the German Government’s €130 billion recovery plan
In order to limit the economic consequences of the Corona pandemic in Germany, the Federal Government adopted an economic stimulus package of 130 billion euros at the beginning of June. The aim is to incentivise more consumption despite the crisis and to support the economy as much as possible. The package comprises more than 50 individual measures. In the following, the most important measures are presented and assessed from an ecological and social point of view (I am a member of the party BÜNDNIS 90/DIE GRÜNEN and chairman of the Green Group in the Council of the City of Dortmund).
Reducing VAT VAT will be reduced from the beginning of July to the end of December 2020. The normal rate falls from 19 to 16 percent, the reduced rate from 7 to 5 percent. The tax losses are estimated at EUR 20 billion. The government hopes that companies will reduce their prices accordingly.
Prices are expected to fall in industries that are fiercely competitive and whose goods are so expensive that a 3 percentage point tax break has noticeable effects. Since the VAT reduction is limited to six months, it may be worthwhile to bring forward larger purchases (such as buying a car) and to complete them by December.
After two months of tax cuts, however, it is not yet possible to see a significant increase in consumer behaviour for larger purchases. Perhaps many people are too concerned about the unclear Corona situation to spend larger amounts.
Unfortunately, a reduction in VAT only works according to the watering can principle. A more targeted approach with a stronger environmental steering effect would have made more sense. The climate will not be helped if the reduction in VAT increases the sale of cars with internal combustion engines. It would have been more targeted to promote the purchase of low-emission drives even more clearly.
Stablesocialcontributions Consumption is only done when the population has enough money. A “Social Guarantee 21” has therefore been adopted: social contributions should not increase, although there are large gaps in social security through the Corona pandemic. The government wants to plug these holes, which will cost around 5.3 billion euros in 2020. Companies also benefit from this scheme, as they pay almost half of the social contributions.
Children’s Bonus An important consumer incentive is the “children’s bonus” of 300 euros. Parents receive it for every child who is still entitled to child benefit. This mainly benefits low- and middle-income families, because for high earners, the child bonus is offset against the tax-free allowance for children. At the same time, Hartz IV recipients are allowed to keep the child bonus. The children’sbonuscostsaround 4.3 billioneuros.
The risk for the government is that these many billions will have no effect. For example, many parents might refrain from spending their child bonuses to save instead because the Corona times are so uncertain.
Support for service industries The service industries hit hard by Corona are to be supported with up to 25 billion euros. These are mainly restaurants, hotels, bars, travel agencies, showmen, event organizers, youth centres, non-profit companies. The state pays up to 80 percent of the operating costs of clubs and other venues, which have to remain closed because of Corona. Solo self-employed people can continue to apply for basic insurance until the autumn without the usual exams.
Supporting the automotive industry There will be no scrapping bonus that would have encouraged the purchase of normal petrol and diesel vehicles. However, the industry is still not running out of steam: EUR 2 billion will be made for “future investments” in the car industry. Further money is earmarked for research and development in the field of electro-mobility and battery cell production. And the state is doubling its share of the purchase premium for electric cars. For battery vehicles with a purchase price of less than 40,000 euros, for example, it rises from 3,000 to 6,000 euros. The bonus for plug-in hybrids, i.e. cars with gasoline and electric motors that can be charged at the socket, is also expected to increase. This has been met with criticism from environmental groups, who criticise the fact that these vehicles are often hardly electrically driven and therefore offer little environmental benefit.
As already written above, effective climate protection requires a shift away from the promotion of internal combustion engines. Unfortunately, this has not happened with the general reduction in VAT.
Promotion of bus and train There is also more money for public transport. For the railways, the Federal Government renewed its commitment to increase equity capital by EUR 5 billion. In support of public transport, the regionalisation funds will be increased once by EUR 2.5 billion. Public transport, however, needs a long-term investment plan for expansion. The agreed resources are far from sufficient for this.
Reduction of the EEG levy (EEG: Renewable Energy Law)
There are also changes to the so-called EEG levy, which finances the expansion of green electricity plants. This is expected to fall from the current 6.8 cents per kilowatt hour to 6.5 in 2021 and 6 cents per kilowatt hour in 2022. Up to EUR 11 billion from the budget is to be spent on this. This relieves the burden on private consumers and businesses. Lowering the price of electricity is a lever to make the switch from fossil fuels to electricity more economical in transport and heating.
Municipal finances The business tax is an important pillar for financing the municipal level. With the Corona pandemic and the associated economic crisis, municipalities are largely breaking away from this important source of income. The federal government will now take over these revenue losses for 6 billion euros. It also covers costs of around EUR 4 billion to finance the basic security for jobseekers, which previously had to be borne by the municipalities.
In order to maintain the financial independence of many municipalities in Germany, it would have been of central importance if the old debts of the municipalities had been taken over by the federal government. Many municipalities, such as Dortmund, are groaning under the weight of the old debts they have had to make up in the past. If the local authorities really should have been helped, then the old debts should have been taken over. Unfortunately, that did not happen.
General comments on the recovery package
The stimulus package is the right measure to deal economically with the Corona crisis. Many details are set correctly, but there is still a lack of social and environmental balance.
The Federal Government could not agree to increase the basic security for the approximately 4 million Hartz IV recipients. With the exception of the children’s bonus, the increase in consumption opportunities is likely to pass this group of people.
The environmental steering effect of the Economic Pact is too small. It contains a lot of short-term investments, but there is no longer-term perspective. In addition to a short-term recovery plan, a medium- and long-term investment package is needed that takes on many urgent tasks. With Corona, questions of digitization and the management of climate change have not disappeared, but are all the more urgent to deal with.
3) Stefan Pfeifer, Economic Advisor to SPD group North Rheine Westphalia reports on the German economic stimulus program – will it re-start the German economy?
Combating the economic consequences of the corona pandemic will be the most important task of government policy in 2020, alongside infection protection and support for those in need through a functioning health and social system. Combating the economic consequences of the corona crisis can be divided into two phases:
The first phase is about ensuring liquidity for both employees and companies. So that they can pay their bills even when economic activities are completely or at least partially flagged. For example, short-time work benefits for employees or bridging aids and solvency security for companies serve this purpose.
In the second phase, the aim must be to counter the spread of the crisis to ever wider areas of the economy in order to break through the economic trough as quickly as possible. This requires major programs that strengthen the economy and employment. Obviously, the Council and Commission of the European Union have also understood this with their European reconstruction plan worth € 700 billion.
But as ambitious as the European development plan is. In view of the slump in the economy that is already evident and the threat of it getting worse, it will not be enough to get the European economies going again. Programs are also needed in the individual nation states.
The economic stimulus program in Germany
To this end, in June 2020 the federal government summarized measures for an economic stimulus program under the title “Fighting the consequences of corona, securing prosperity, strengthening future viability”. In 55 measures, costing around €140 billion will be made available for an economic and crisis management package.
The number of measures indicates that funding is very broad (“with the watering can” helping all parts of the economy).
The program is obviously the result of political negotiations and compromises within the federal government. Between positions that want to trigger increases in demand through tax cuts and incentives for private actors (represented more by the CDU / CSU) and those that rely on direct demand control by increasing state spending on investment and consumption (more represented by the SPD) .
The effects of the largest measure in the package – the temporary reduction in VAT from 19% to 16% (or 7% to 5%) – are indirect. After all, this moderate reduction – if it is passed on by retailers – will particularly benefit those people who have to count every penny. Unlike the tax breaks for companies (€ 13.3 billion), the promotion of new technologies (€ 11 billion) or the promotion of e-mobility (€ 8.1 billion), which are classically designed to be supply-oriented.
However, the program also reveals directly the priorities in which the economy is to be strengthened and economic and social hardship is to be cushioned.
The municipalities are being supported with a total of € 16 billion in order to compensate for their corona-related tax losses, to pay increased maintenance costs, to finance local public transport and to build schools, day-care centers and sports facilities.
11 billion euros are planned to relieve citizens and companies of paying the levies for the expansion of renewable energies.
The program pays particular attention to families with children: it pays a child bonus of 4.3 billion euros, tax relief for single parents (0.7 billion) and a subsidy for apprenticeships (0.5 billion).
It is also interesting which priorities the federal government lays out in the chapter about future investments:
Strengthening the health system comes first with € 10 billion.
But hydrogen production (€ 9 billion), the Deutsche Bundesbahn (€ 5.0 billion) and the digitalization of administration (€ 4.3 billion) also receive a large share.
Individual areas such as climate-friendly shipping, the modernization of aircraft fleets, CO2 building renovation, cultural funding, the timber industry or the sector of non-profit organizations are given smaller contributions.
What is not included in the economic stimulus plan
It is not only important what is in the program. It is also important what did not make it. In particular, two much-discussed measures cannot be found in the program: unlike in the economic stimulus program of the financial crisis in 2009, this time there is no purchase bonus for new cars.
The minister-presidents of the “car countries” Bavaria, Baden-Württemberg and Lower Saxony, as well as IG Metall, were particularly committed to such a purchase bonus. However, against the background of the intensified discussion about climate change and the need for socio-ecological transformation, it was not enforceable.
This also applies to the demand of the SPD for the redemption of the old debts of the municipalities, which in particular regions with structural breaks (f.i. Ruhr area) are now so high that they can hardly be removed on their own.
My opinion about the German economic stimulus plan
The German economic stimulus plan is a step in the right direction. The size of the federal government’s stimulus package seems impressive. It is wise that, with a few exceptions, the federal government wants to help all consumers and companies. This takes many interests into account. However, this is partly at the expense of focus.
Therefore, not only those who are existentially dependent will benefit from these measures. But also all those who were less or not at all affected by the crisis and who were already in good shape beforehand.
There is a lack of strong public investments, especially in public infrastructure and for digitization, in order to orient the German economy towards the future. Above all, the lack of debt relief on the part of the municipalities is a flaw, because the cities and municipalities need more leeway in order to be able to invest locally.
The stimulus plan is an important step in helping the economy restart. However, it is to be feared that this might not have been the last economic stimulus program, because we cannot assume a quick and sustainable recovery.
Stefan Pfiefer – Sept 2020