European Commission proposes €100 billion solidarity loans to support jobs and lives

The European Commission has today pledged €100 billion in loans to support schemes that protect jobs, employees and self-employed against dismissal and loss of income.

The aid package, called SURE, is intended to support short-time work schemes that would enable workers to stay in employment at a time when businesses are being crushed by the reduced economic activity brought about by the coronavirus pandemic.

But the whole package also includes changes in rules to give member states greater flexibility to spend funds to support vulnerable people and the health sector.

The loans will be based on guarantees provided by member states and companies will be able to temporarily reduce the hours of employees or suspend work altogether, with income support provided by the State for the hours not worked. The self-employed will receive income replacement for the current emergency.

Farmers and fishermen will also receive support, as will the most deprived.

Commission President Ursula von der Leyen said that in this, only the strongest of responses will do.

“We must use every means at our disposal. Every available euro in the EU budget will be redirected to address it, every rule will be eased to enable the funding to flow rapidly and effectively. With a new solidarity instrument, we will mobilise €100 billion to keep people in jobs and businesses running. With this, we are joining forces with member states to save lives and protect livelihoods. This is European solidarity,” she said.

The European Commission wants to cushion the economic blow in order for the bloc’s economy to be ready to restart when conditions are right.

The Fund for European Aid to the Most Deprived will evolve to meet the new challenges posed by social distancing rules that can cut off vulnerable people from the most basic needs.

The fund will use electronic vouchers to reduce the risk of contamination as well as the possibility of buying protective equipment for those delivering the aid.

The Commission said farmers and fishers will also be helped by freeing up existing funds and making it less cumbersome for States to seek support.

The EU executive said all uncommitted cohesion policy funds will be redirected to address the effects of the public health crisis and co-financing requirements will be abandoned.

The Commission said it was working to ensure the supply of protective gear and respiratory equipment. Despite the strong production efforts of industry, member states still face severe shortages of protective gear and respiratory equipment in some areas.

€3 billion will be put into the Emergency Support Instrument, of which €300 million will be allocated to RescEU to support the common stockpile of equipment.