The COVID-19 outbreak put Europe, as well as the rest of the world, under exceptional public health, economic and social stress. In addition to the high death toll in 2020, economic activity suffered an exceptional slump and the state of the EU labour market deteriorated. These adverse developments are reflected in all main economic and social indicators, including for young people, who are among the most affected by the crisis. The EU and its Member States have been mobilising a wide range of measures to tackle and mitigate the impact of the crisis. At the EU level this included the flexibilisation of state aid, with the adoption of the State Aid Temporary Framework in March 2020, and fiscal rules to enable national governments to financially support healthcare systems, businesses, and keep people in employment during the crisis. The measures also include a more flexible use for the EU Cohesion Funds and an innovative instrument to underpin 'temporary Support to mitigate Unemployment Risks in an Emergency' (SURE). The major European Recovery Plan, comprising up to EUR 1.8 trillion, involves the creation of a new recovery instrument, 'Next Generation EU', which is embedded in a modern and revamped long-term EU budget. At the same time, the European Commission, with the adoption of EASE (Recommendation on Effective Active Support to Employment following the COVID-19 crisis), outlined a strategic approach to gradually transition from emergency measures taken to preserve jobs during the pandemic to new measures needed for a job-rich recovery, promoting job creation and job-to-job transitions, including towards the digital and green sectors.

In 2022, the EU labour markets have demonstrated remarkable resilience despite Russia's war of aggression against Ukraine, high inflation and an economic slowdown. We have witnessed record levels of employment, with the highest number of people in employment and the lowest levels of unemployment ever. This demonstrates the resilience of our labour markets and our social market economy.

The exceptional response of solidarity to the COVID-19 pandemic has helped to mitigate some of the socio-economic impact of the crisis, keeping income inequality and poverty in the EU at bay. This year's edition of the Employment and Social Developments in Europe (ESDE) confirms the tentative findings of the previous one in this respect and provides further insights on the recovery. Nevertheless, during the last two years, some groups - such as young people - were more affected than others. These inequalities risk to be reinforced by the consequences of Russia's war of aggression against Ukraine, particularly given the recent price spikes.