Our view: The problem facing businesses is not liquidity, but labour shortage


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Government support programs that have seen businesses go through the last 18 months of closures and trade restrictions will end in late October, it was announced last week. In the past two months, aid has been targeted at companies that had a real problem, Labor Minister Zeta Emilianidou said last week.

Emilianidou almost apologized for the end of the schemes. “As the economy recovers, unemployment is at 5.2%, we have a big increase in hiring, we think two more months is satisfactory for the programs to continue.” After October, she said, there will be other employment and training programs that ended direct cash assistance.

On the contrary, the schemes have lasted a little longer than they should have and the government has no obligation to apologize for putting an end to them. They served their purpose, protecting people’s jobs when the government locked the country down and we lived under a regime of widespread restrictions on travel and trade. We have now returned to normalcy, all sectors of the economy are open and there is no reason to continue regimes.

The Law on State Guaranteed Loans, aimed at providing liquidity to businesses, is still awaiting legislative approval. This is another form of business aid, which may not be needed by the time it is approved by the parties, which had blocked the first version of the program because they feared the government would convert it. in vote during the legislative elections of last May. The second version before the House could also be dropped, as the economy rebounds.

In fact, the problem for companies is not liquidity, but the shortage of labor. Businesses in all sectors of the economy have great difficulty finding workers to hire. With an unemployment rate of 5.2%, which Emilianidou considers close to full employment, it will not be easy for companies to hire the staff they need. This is a direct result of the departure of EU workers, estimated at nearly 100,000, during last year’s lockdown. They did not return due to the lingering uncertainty caused by the pandemic.

The end of support mechanisms and the return to normalcy of business could pave the way for a gradual return of these workers. It won’t happen overnight, and they’ll likely wait to see how the situation with the pandemic unfolds before making the decision. It is the labor shortage that threatens to slow growth. Dealing with this should be the main concern of the Minister of Labor, rather than support programs and employment policies for graduates.

There is no need for state policies and plans when, as the minister said, we are close to full employment conditions. These are workers the economy needs.

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