Watch out for the risks associated with short-term employment

it is becoming more apparent that the coronavirusets the consequences will be very far-reaching. This also applies to the global economy. The global growth rate

Watch out for the risks associated with short-term employment

it is becoming more apparent that the coronavirusets the consequences will be very far-reaching. This also applies to the global economy. The global growth rate is expected to decline by 0.5 percentage points on an annual basis.

in sweden, we should, according to the minister of finance, count on a somewhat smaller dip - from 0.8 percent of the GDP growth rate to 0.5 per cent in 2020. This means that, in this case, that Sweden will open the door to a period of recession.

even before the coronautbrottet saw the Swedish growth rates dismal in europe. According to the EUROPEAN commission's latest forecast is for the EU countries, which are expected to have a lower rate of growth than for Sweden in the year 2020.
Well, with a low public debt,
So just how well placed is the an impending economic crisis? When it comes to monetary policy, there is not a lot of room to step on the gas and after the Riksbank's minusräntepolitik. The better it looks on the fiscal side. As sweden has strong public finances and is one of Europe's lowest public-debt.

Also, if we were to stand up in the face of a prolonged global downturn, Sweden has good potential to support the economy, but public finances are bleeding. Not at least the municipalities are going to need a hearty addition in the dual pressures of economic and demographic crisis in russia.

this is A major cause for concern is, of course, employment. Correspondingly, the promise of the EU's lowest unemployment rate in the year 2020, the ending of a dunderfiasko. Now januaripartierna up with a proposal to protect jobs by extending the use of the so-called short-time work. It is proposed that the working hours and the salary is reduced for that employee, which, in return, avoids the termination of employment. The bill is divided between the employees, businesses, and government.

the Spontaneous, you can say that is an ingenious suggestion. Why force businesses to lay off employees due to a temporary crisis that will quickly blow over? However, even today, there is a system of short-time working schemes, which can be activated in the event of an economic crisis. It is now being proposed is nothing different, and potentially more of a concern.
Keep non-viable businesses in distress?

Januaripartierna to put in place a permanent system of short-time working schemes, which are the companies that are affected by temporary disruptions to be within the scope of the. There are several potential pitfalls of heavy bodies - such as the national institute of economic Research and the Swedish national financial management authority points in its response.

there is an obvious Risk that the amount of state aid is one of the ways to keep non-viable companies in distress. This would prevent the necessary structural change in the economy when workers remain in low-productivity firms. The competition may also be distorted if firms in an industry have a right to state support. Another danger is the fact that the company is going to be abusing the privilege, and thus borne by the central government, in vain.

READ MORE: , the American economy is not at all a smooth ride

Updated Date: 05 March 2020, 11:00

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