Keep unemployment from rising up. Determined to not jeopardize the government’s flagship measure against unemployment, Minister for Labor and Social Affairs Ursula von der Leyen (CDU) initially wanted to extend the law until the summer 2012, but she came up against the FDP, her partner within the coalition. Adopted on June 19, 2009 at the height of the global financial and economic crisis (see our dispatch No. 090664), this act provides that the Federal Employment Agency pays for all contributions for employees on short-time working after six months. It was supposed to expire on December 31, 2010. Yet, removing this support would have led to a substantial increase in short-time working measures for businesses starting in 2011. Thus, many would have been forced to give this system up and cut jobs. Besides, the decision the government took last fall, to extend the provision allowing businesses to enjoy short-time working measures for 18 months (instead of 6 at first), would have lost any interest (see our dispatch No. 091065). This risk is now gone. The new act should lead to additional costs amounting to about €800m in 2011 and 2012 for the Federal Employment Agency.
n December 31, 2010. Yet, removing this support would have led to a substantial increase in short-time working measures for businesses starting in 2011.
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