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COVID-19 recovery fund veto 'could cause employment tragedy in Europe'

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By Christopher Pitchers  & Sandor Zsiros
COVID-19 recovery fund veto 'could cause employment tragedy in Europe'
Copyright  PASCAL GUYOT/AFP or licensors   -   Euronews

Hungary and Poland's veto of the bloc's pandemic recovery fund could cause unemployment levels to explode.

According to the European Trade Union Confederation (ETUC), 40 million people have benefited from temporary unemployment schemes due to coronavirus.

And this is in addition to the 20 million who are already unemployed.

Luca Visentini, ETUC's general secretary, told Euronews that this economic downturn is far worse than in 2008.

"If you compare these figures with the effect in terms of unemployment from the financial crisis a few years ago, it is three times the size, in terms of impact," Visentini said. 

"So I mean, if the emergency measures and then investment do not come very quickly, then the risk is that we will have an employment tragedy exploding in Europe and also many many companies going bankrupt. So it is really really time for action." 

Among the most affected, are Spain and Italy, two of the countries that should receive the most money from the recovery fund. The funds are vital for their economies.

In Italy, if the economic situation doesn't improve rapidly, up to 270,000 companies in the trade and service industries could close permanently, according to Confcommercio.

In Spain, the situation is just as dire, and one MEP from there, Jonás Fernández, is not happy with Hungary and Poland.

"Honestly, I cannot understand the current veto, because if they insist on the current approach, they will be completely outside of the Next Generation and the new MFF (Budget), and in any case, the Commission will apply to them the rule of law regulation," Fernández told Euronews.

In theory, the money from the recovery fund should begin to reach EU countries by mid-2021, but the veto threatens to delay this.