Our regular human resources management news roundup from across Europe from the Federation of European Employers (FedEE).

EUROPE: Recession, what recession?

Whilst newspaper journalists have been warning about an imminent recession, current evidence indicates only a temporary slowdown in the rate of economic growth.

The conventional definition of a recession is two successive quarters without economic growth. During the last two available quarters, GDP at constant prices for the EU27 countries has risen by 0.5 percent (Q2 2007) and 0.8 percent (Q3 2007). Over 2007 as a whole, the EU economy grew by 2.9 percent and during 2008 the rate of growth is predicted by the European Commission to fall slightly to 2.4 percent. In fact, across the EU, real unit labour costs have fallen through each of the last five years for which statistics are available (2002-6) and the latest unemployment figures show that the proportion of people out of work fell from 7.7 percent to 6.9 percent over the year to November 2007.

Even the OECD's monthly longer leading indicator points to no more than 'a moderate slowdown in economic activity' over the next six months, with Germany and the UK faring better than the other leading EU economies. Company stocks may continue to decline in value for some time, but changes in secondary stock trading prices will take many months to filter through into sales figures or restrictions on company borrowing. There is a strong prospect that companies will be able to ride out the first half of 2008 and that downsizing will be largely confined to smaller firms and businesses in the service sector that cannot sustain growth by tapping into global markets.

BELGIUM: Tax-free bonus launched

A national collective agreement on the payment of bonuses to employees that was concluded at the end of 2007 has now been incorporated into Belgian law.
 
A new payment for 'non-recurrent advantages linked to results' may be introduced by a company, provided that it does not replace or substitute any other element of a remuneration package. The bonus may not exceed 2,200 euros per year and will not be subject to any tax or social security deductions before being paid to an employee. Their employer will be subject to a special social security levy of 33 percent of the bonus value, although the levy will count as an employment cost and may be offset against corporation tax.

BULGARIA: Reform of collective bargaining law

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