Aiming to safeguard thousands of jobs at risk across the European Union due to the coronavirus outbreak, the Commission proposed on Wednesday, the creation of SURE, a temporary emergency support instrument worth up to 100 billion euros.
Designed to help protect jobs and workers impacted by the Covid-19 pandemic, the temporary Support to mitigate Unemployment Risks in an Emergency (SURE) will provide financial assistance of up to 100 billion euros in the form of loans granted on favorable terms to member states which request aid.
The Commission’s proposal will need to be approved by the Council before it is implemented.
The said loans are meant to help EU members deal with the sudden rise in public spending resulting for the repercussions of the coronavirus epidemic.
More specifically, the loans will help EU countries cover the costs related to the creation or extension of national short-time work schemes and other similar emergency measures that have been put in place for the self-employed.
The main focus of the aid program will be on short-time work schemes -company decisions to temporarily reduce the hours worked by employees, backed up by public income support for the hours not worked. Similar schemes apply for income replacement for the self-employed.
SURE is one more EU action aimed at protecting Union citizens and mitigating the pandemic’s severe socio-economic consequences.
“Companies are paying salaries to their employees, even if, right now, they are not making money. Europe is now coming to their support,” said European Commission head Ursula von der Leyen.
“If … companies run out of work because of a temporary external shock like corona, they should not lay off their workers.”
To finance the loans, the Commission will borrow on financial markets. Member states will benefit from the EU’s strong credit rating and low borrowing costs.
The procedure after a request by a member state involves consultation and assessment of the public expenditure increase directly related to pandemic-induced needs, to be followed by a proposal.
Earlier the Commission eased restrictions on state aid allowing members to spend freely to protect their economies.