The necessity of guaranteeing protection for workers and preventing healthy firms from exiting the market must be reconciled with the need not to hinder the automatic reallocation of resources towards the firms and sectors with the best growth potential. This process is indispensable to foster the efficiency gains that are fundamental to economic growth.
As uncertainty about the economic outlook diminishes, the use of support instruments can gradually be made more selective. Access to broad-spectrum instruments that are significantly more generous than ordinary ones can be revised to make them conditional on firms’ ability to retain their workers and, at the same time, the general freeze on terminations can be eased.