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State plans four-day work week

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The Labour and Social Affairs Ministry plans to introduce a four-day work week in an attempt to keep the unemployment rate from rising further. The government would subsidise companies’ wage expenditures while employees stay home due to a lack of orders.

“At a meeting with unionists and employers on Wednesday, we came to an agreement that we will continue working on the idea of kurzarbeit,” said the ministry’s Marie Bílková, using the name a similar plan goes by in Germany. “But since it will be necessary to change legislation, I cannot imagine the system taking effect before the middle of 2010,” she said.

There is a good chance that the system will be introduced. The Finance Ministry has not rejected it, but says it will have to find money for the project in the state budget. “If somebody tells me what specific advantages kurzarbeit is going to bring, then I will not oppose it. But it is not possible to simply adopt a plan just because it works in another country,” Finance Minister Eduard Janota told HN.

Trade unions are promoting the system as well, claiming it would cost the state less than unemployment benefits. The Social Democrats have a similar measure in their election platform.

The Civic Democrats have not dismissed the plan either. ODS deputy chairman Petr Nečas said the party “admits this option” on condition that employees would pursue training during their free day. ODS would use EU money for this purpose.

The ministry is exploring the details of how the system would work. Otherwise it should offer temporary relief to businesses that meet certain requirements, including no debt to the state and a guarantee of future operation.

Analysts estimate that kurzarbeit has saved hundreds of thousands of jobs in Germany, where 3.5 million people are currently unemployed. In the past three months, German unemployment has grown slower than data on businesses would suggest.

Critics of kurzabeit point to Institute for Employment Research data which suggests that slowing growth in unemployment would cost German businesses EUR 5 billion this year – money they would save if they cut jobs. The government would spend an additional EUR 6 billion on subsidies by the end of the year.

Many experts claim that the measure would only postpone the inevitable, likening kurzarbeit to car-scrapping incentives intended to boost the automotive industry. Critics question what happens when the state money stops flowing.

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