The strongest economies in the euro-zone (and at the same time the most important trade partners of Serbia) have been severely hit by the corona virus pandemic. In Germany and Austria, where around 750,000 Serbian citizens live and work, the economy has been at a stand-still for almost two months and the unemployment increased by more than 10%. In Germany the government expects a big surge of bankruptcies and additional three million unemployed, while in the US, with its numerous Serbian community, their number may soon go over 42 million.
This situation made more than 400,000 Serbian citizens, mostly unqualified workers or those whose status has not been regulated, go back home. According to the economists, the return of such a large number of workers will surely lead to an increase of our unemployment rate. As many of the returnees say, a big number of workers in Western Europe were laid off because of corona crisis and no one knows how long this situation will last. According to the data of the National Employment Agency there were 513,058 unemployed in Serbia at the end of March.
“There is an impression that the employers in Germany, Austria, the Netherlands and other countries, where many Serbs live and work, fire the foreigners first, but to a certain extent this is logical. Because of the mass dismissals many of the “guest” workers will have to go back home and consequently cause an additional unemployment, much higher than the one we had before the epidemic. At the same time, an increased offer of labour will exert pressure on the rest of workers and make them feel more anxious and insecure “, explains the economist Ljubomir Madžar and adds that fierce competition on labour market will put employers in a more advantageous position and facilitate further restrictions of workers’ rights.He thinks, however, that as time goes by, people will start thinking about returning to Western Europe. As soon as the corona virus crisis is over, their employers will also be readier to install them at their previous workplaces. “Those workers have already acquired a good reputation there, rooted themselves in local societies, adjusted to the new culture and social environment, so I’m sure that for employers a come-back will be an attractive option. Moreover, it is well known that the demographic situation in the West does not inspire much optimism. The population is rapidly getting old, number of pensioners rising and number of active citizens decreasing, which means that new workers will do those countries quite good. So, I expect them to go back to places they temporarily had to leave”, concludes Madžar.
Ljubodrag Savić, Professor at the Faculty of Economics in Belgrade, is of the same opinion, but adds that certain number of returnees will probably stay and look for a job in Serbia. However, working mostly in the informal sector and having no motivation to apply for a place on the Employment Agency’s list, they shouldn’t increase the unemployment rate significantly. “Those who have returned to Serbia are mostly workers who do manual work which is often rejected by those who stayed. People most often entered EU with tourist visas. One part of their ex-jobs will survive, but not many of them and that is why they will choose to stay here. Those who opt for a return, will have to consider some limiting factors, not depending on us but being part of the EU and member-states’ regulation”, explains Professor Savić and adds he personally expects to see the situation in Western Europe improved by the end of the year – unless the pandemic reappears. Reminding that Germany lacks labour force, he warns us that their GDP has fallen by a two-digit number, and concludes that with such future prospects it is not realistic to expect the number of employees to stay the same
