The EU 100 billion against unemployment will be freely accessible
By not pre-allocating the item by country, the Brussels proposal grants a higher margin to Spain and Italy, the most affected by the coronavirus
The European Commission, as announced yesterday by its President, Ursula von der Leyen, released on Thursday all the details of what is its latest emergency proposal to alleviate the economic impact of the coronavirus: a solidarity fund of 100,000 million euros Aimed at financing federal aid that supports temporary employment regulation files (ERTES) or coverage for the self-employed. The formula, named SURE, will be discussed by the ministers of Economy and Finance next Tuesday as part of the procedure before its final validation.
It is based on loans that the EU will grant to the States in favourable conditions so that they tackle the sudden increases in public spending and thus contain, as far as possible, an indentation of unemployment that this Thursday already gave the first fatal information for Spain: a month of March in which 900,000 jobs were destroyed. The European Commission would issue debt in the markets, to obtain the liquid under conditions that will undoubtedly be more advantageous than in individualized issues. But before going to auction, all countries will have to provide guarantees that add up to a minimum value of 25,000 million euros (a quarter of the fund).
With this new instrument of solidarity, we will mobilize € 100 billion to keep jobs and businesses running. We are joining forces with the Member States to save lives and protect livelihoods. This is European solidarity “, defended Von der Leyen during the press appearance. The day before, the German had advanced it, heading expressly to Spain and Italy, with direct allusions to the collapse of the business network in the areas of Milan or Madrid. “They need our help to get ahead,” he said.
The instrument launched by Brussels is open to all partners. Still, given that it has a specific character – limiting the damages to enable a quicker restart when the health crisis passes – and it is born without pre-allocation of amounts or percentages to each capital, in practice Spain and Italy, those who are suffering most crudely The blows of the pandemic will be those with the most extensive margin to be able to use it.
“The fund will go where it is most needed. It will be of particular importance to those most affected », remarked from a community executive that also advocates redirecting all available structural funds to the response to the coronavirus. And that does not exclude any labour sector because farmers and fishers would also receive support from the EU.
Berlin and The Hague
But with the focus on SURE (which could be translated with a ‘of course’ in Spanish), the question is whether it will have the necessary basis. In other words, since it relies on the “voluntary” guarantees of state governments, Will these guarantees be obtained? The bottom of the matter is more than known: Germany and the Netherlands have clearly expressed their refusal to a debt mutualization. The plunge to the coronabonos is the loudest example. In this regard, Von der Leyen spoke on Thursday that the Commission’s request had been received in an “open and positive” manner. Also in Berlin and The Hague. But we will have to wait for the analysis of the economic teams next week.