Financial expert: Federal Employment Agency is rebuilding reserves after the corona pandemic

Financial expert: Federal Employment Agency is rebuilding reserves after the corona pandemic

According to a report by www.tagesschau.de,

The Federal Employment Agency (BA) is planning to rebuild its reserves after spending on short-time working benefits during the corona pandemic completely used up the federal agency's reserves. The CEO, Andrea Nahles, stated that the budget was solid and that reserves totaling 4.8 billion euros should be built up. The Institute for Labor Market and Occupational Research (IAB) recommends that the BA should have reserves of at least 25 billion euros for “future noticeable recession phases”.

The BA's financing is based primarily on contributions to unemployment insurance. With the recovery in the labor market, the BA's financial situation is improving. A total of 44.6 billion euros in spending is planned for 2024, a quarter of which will go to further training.

However, cautious optimism remains in order, as the deputy head of the agency's board of directors, employer representative Christina Ramb, warned against too much optimism. Especially in uncertain times, it is important that the Federal Agency is resilient and well positioned.

Building up reserves can have a positive impact on the stability of the market, as the Federal Employment Agency will be better prepared for future crises and economic downturns. In addition, the planned investments in training and support for jobseekers can lead to a more skilled and resilient workforce in the long term. The concern about too much optimism is justified and shows that conservative budget planning is necessary to take into account the workload and the management of future crises.