EU: After the pain - what prospects for gain?
Eurostat, the European statistical office, has reported that the EU economy contracted by 4.4 percent over the year to Q1 2008. This compares with a 2.6 percent contraction in the US economy over the same period.

Nevertheless, the latest OECD economic prediction figures indicate that a recovery is now in prospect for some EU countries. Composite leading indicators for France and Italy are in their third successive month of improvement, whilst the UK has achieved a positive trend for two consecutive months. This would suggest that Italy could lead the way out of the current recession with a slight improvement in GDP this summer. However, although the pace of decline in the predictive indicator for the German economy has slowed in recent months, it could be early next year before German GDP trends are likely to reverse.

EU: Draft agreement on parental leave
A draft agreement on parental leave drawn up by the EU umbrella group Business Europe and the European Trade Union Congress (ETUC) increases the minimum leave period from three to four months and extends the maximum age of a child for which parental leave may be taken from eight to nine years.

The agreement requires employees to give a minimum notice period before starting leave and to specify in advance when they would be returning to work. Each parent would be required to take at least one month of leave and employers would be obliged to 'consider and respond to' requests from returning parents to changes in their working hours. The agreement contains no facility for payment during leave and this would remain an issue for individual EU member states to resolve.

The draft is currently being circulated amongst member organisations at a national level. If approved, it will become the basis for a revised EU parental leave directive to replace Council Directive 96/34/EC of 3 June 1996.

France: Government tackles youth unemployment
The French president, Nicolas Sarkozy, has launched a new EUR 1.3 billion initiative that aims to put half a million young people into jobs by June 2010.

The focus of the plan will be a series of financial incentives for companies to hire young workers, either through apprenticeships or traineeships. For example, companies with less than 50 employees will receive EUR 1,800 to engage a young apprentice and there will be no obligation to pay social security during the initial period of employment. Companies will receive a grant of EUR 2,000 each time they hire a young worker without a baccalaureate, and a payment of EUR 3,000 for each intern given a regular full-time contract before September 2009.

Spain: Permanent workers rise by 70,000
Although the total number of wage earners with temporary contracts in Spain declined by 1,044,600 over the year to Q1 2009, the number of workers with permanent contracts increased by 70,200.

In Spain's two-tier labour market, employers have been reluctant to hire workers on permanent contracts because of the prohibitively expensive level of compensation that must be paid when terminating such workers. But fixed-term workers who have been subject to two or more contracts with the same company in the same job for more than 24 months (within any 30 month period) may now claim permanent employment contracts. It is likely to be the exercise of this right that has caused the increase in the total number of permanent workers, in spite of the current economic downturn.

United Kingdom: Changes in statutory minimum wage
The UK adult minimum wage will rise by just seven pence to GBP 5.80 (EUR 6.4) an hour from October 2009. Similarly modest increases will be applied to the two minimum wage rates for younger workers. The UK government has also announced that, from October 2010, the age from which the adult rate applies will be reduced from 22 to 21 years.

In a further move, the labour relations minister, Pat McFadden, has announced that minimum pay regulations are to be amended this autumn in order to prevent employers using money collected from tips to bring employees' pay up to the statutory minimum wage level. In addition, the government is drawing up a voluntary tipping code for use by employers.

Other European news in brief

Bosnia and Herzegovina
The average gross wage in Bosnia and Herzegovina during March 2009 was BAM 1,208.02 (EUR 617.65). This represents an increase of 13.5 percent over the year since March 2008.

Cyprus
The minimum monthly starting wage for office clerks, salesmen, nursing assistants, childcare assistants, school assistants and carers working in Cyprus has been increased from EUR 743 to EUR 791. After six months' service with the same employer, the minimum monthly wage now rises to EUR 840. The new minimum hourly rate for security guards is EUR 4.3, rising to EUR 4.62 after six months' service.

France
Recruitment activity in France during April was 23.8 percent lower than in the equivalent month last year. The sectors most affected by the decline in hiring were manufacturing (-47.9 percent) and construction (-46.8 percent). However, demand in other sectors was only 13 percent down. The most vacancies during April were in Ile de France, Rhone-Alps and Provence.

Germany
A revised German employee assignment law has just been published. Collective agreements already set statutory minimum wage rates in the building, electrical handicraft, janitorial and postal sectors, and the new regulations extend minimum wage protection to employees in six further sectors - care of the elderly, security services, refuse collection and disposal, vocational and further education, industrial textile services and hard coal mining (special work). The rates will also have to be paid by foreign companies posting employees to Germany to work on assignments in these sectors.

Greece
The Greek interior ministry has informed local municipalities and prefectures that permanent residence permits will no longer be issued for non-EEA or Swiss nationals. Third country nationals residing legally in Greece for a continuous period of 10 years may now only apply for further permits lasting a maximum of 10 years. Renewal of these may not be permitted if the foreigner becomes unemployed, fails to make appropriate social security contributions or commits a criminal offence that attracts an imprisonable term of one year or more.

Liechtenstein
Although Liechtenstein applied for entry to the Schengen free movement zone last February, Germany and Sweden have refused to accept its membership. Switzerland has operated an open border with Liechtenstein since 1923, but when Switzerland entered the Schengen area in December last year, the border with Liechtenstein became a Schengen-external frontier requiring border controls on the movement of people. As a compromise, Switzerland has introduced video surveillance on all border crossings with the principality.

Netherlands
The Dutch government is moving ahead with a scheme to discourage unemployed researchers from emigrating to other countries. Under the cabinet proposal, researchers threatened by redundancy would be contracted out to universities and technological institutions for a period of 18 months, while still remaining formally on the payroll of their private sector employer. During this period, most of the wage costs would be taken over by the government.

Poland
The Polish Labour Code has been amended to reduce the period that an employer is responsible for sick pay to 14 days in the case of employees aged 50 years or more. Employers remain responsible for meeting the sick pay costs of employees under the age of 50 during the first 33 days of certificated absence.

Russian Federation
The Russian central bank's first deputy chairman, Alexei Ulyukayev, has predicted that consumer price inflation is likely to rise by one percent between April and May 2009. The monthly rate has fallen significantly since the turn of the year when the monthly increase was 2.4 percent.

Switzerland
Switzerland now has the highest proportion of economically active people aged 55-64 in Europe. During the last 12 years, the proportion of employed people in this age bracket has risen from 63.5 percent to 68.4 percent. This compares with an EU average of 44.7 percent.

Sweden
Half of all Swedish employees are no longer making contributions to unemployment insurance schemes. In the youngest age bracket, three out of every four employees no longer has insurance cover. Last year, a government enquiry recommended that a compulsory scheme should be introduced, but no measures to implement this recommendation are planned until next year.

 
Copyright: FedEE Services Ltd 2009