Questions and answers: Commission proposes SURE, a new temporary instrument worth up to €100 billion to help protect jobs and people in work

unemployment

(Credit: Unsplash)

This article is brought to you in association with the European Commission.


What is SURE and why is the Commission proposing it?

The new instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE) is designed to help protect jobs and workers affected by the coronavirus pandemic. It will provide financial assistance, in the form of loans granted on favourable terms from the EU to Member States, of up to €100 billion in total. These loans will assist Member States to address sudden increases in public expenditure to preserve employment. Specifically, these loans will help Member States to cover the costs directly related to the creation or extension of national short-time work schemes, and other similar measures they have put in place for the self-employed as a response to the current coronavirus pandemic.

What are short-time work schemes?

Short-time work schemes are programmes that under certain circumstances allow firms experiencing economic difficulties to temporarily reduce the hours worked by their employees, which are provided with public income support for the hours not worked. Similar schemes apply for income replacement for the self-employed.

SURE would provide additional EU support to finance Member States’ short-time work schemes, and other similar measures, helping to protect jobs.

All Member States already have some form of national short-time work schemes in place.

Why is the Commission focusing on supporting short-time work schemes?

The SURE instrument is just one element of the Commission’s comprehensive strategy to protect citizens and mitigate the pandemic’s severely negative socio-economic consequences.

Many businesses experiencing difficulties are being forced to temporarily suspend or substantially reduce their activities and the working hours of their employees. By avoiding wasteful redundancies, short-time work schemes can prevent a temporary shock from having more severe and long-lasting negative consequences on the economy and the labour market in Member States. This helps to sustain families’ incomes and preserve the productive capacity and human capital of enterprises and the economy as a whole.

How much funding will be available for the EU as a whole and for individual Member States?

Up to €100 billion in total financial assistance will be available to all Member States.

There are no pre-allocated envelopes for Member States.

How will the Commission secure and provide funding for the SURE instrument?

Financial assistance under the SURE instrument will take the form of a loan from the EU to the Member States that request support.

To finance the loans to Member States, the Commission will borrow on financial markets. The Commission would then provide the loans to Member States on favourable conditions. Member States would, therefore, benefit from the EU’s strong credit rating and low borrowing costs.

The loans will be underpinned by a system of voluntary guarantees from Member States committed to the EU. The instrument will start to function once all Member States have committed to those guarantees.

How will the conditions of each loan be decided?

These loans should be used by Member States to finance short-time work schemes for employees or similar measures for the self-employed.

Following a request by a Member State for financial assistance, the Commission would consult the Member State concerned to verify the extent of the increase in public expenditure that is directly related to the creation or extension of short-time work schemes and similar measures for self-employed. This consultation will help the Commission to properly evaluate the terms of the loan, including the amount, the maximum average maturity, pricing, and the technical modalities for implementation.

On the basis of the consultation, the Commission would present a proposal for a decision to the Council to provide financial assistance.

Once approved, the financial assistance will take the form of a loan from the European Union to the Member State requesting support.

How will the guarantee system work?

Loans provided to Member State under the SURE instrument would be underpinned by a system of voluntary guarantees from Member States. This will allow the Commission to expand the volume of loans that can be provided to Member States.

This guarantee system is necessary to achieve the necessary capacity while at the same time ensuring a prudent financing of the SURE instrument.

To this end, a minimum amount of committed guarantees (i.e. 25% of the maximum amount of loans of €100 billion) is needed.

How does this instrument relate to the previously announced European Unemployment Reinsurance Scheme?

In the Communication setting out its coordinated economic response to the coronavirus pandemic, the Commission committed to accelerating the preparation of its legislative proposal for a European Unemployment Reinsurance Scheme.

The SURE instrument is the emergency operationalisation of the European Unemployment Reinsurance Scheme and is designed specifically to respond immediately to the challenges presented by coronavirus pandemic.

It in no way precludes the establishment of a future permanent unemployment reinsurance scheme.

What are the next steps?

The Commission’s proposal for a SURE instrument will need to be swiftly approved by the Council.

The new instrument will be of a temporary nature. Its duration and scope are limited to tackling the consequences of the coronavirus pandemic.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Five cities short-listed to become the European Youth Capital 2017

Dangers of poor quality health care revealed ‘in all countries’: WHO report

Writing a new story in gender inequalities: women gaining space and respect in medicine

Africa cannot afford to lose doctors to COVID-19

UN aid teams scramble to reach ‘most remote places’ cut off by Cyclone Kenneth in Mozambique

Climate change hits the poor hardest. Mozambique’s cyclones prove it

World’s first space sustainability rating launched

These are the refugee athletes at the Tokyo Olympics

Italy should boost spending and strengthen cooperation and integration of employment services to help more people into work

How AI can inspire doctors to be more inventive

The US banks drive the developing world to a catastrophe

COVID-19 outbreak: Commission supports repatriation of EU citizens from cruise ship in Japan

Commission welcomes European Parliament adoption of EU4Health programme

WHO and IFMSA as transcendent pillars for world improvement

vSudan: UN chief calls for ‘positive momentum’ as civilian rule talks stall between military and opposition

Nokia wins Commission’s approval for Alcatel-Lucent acquisition: a new way for antitrust cases?

Global health challenges require global medical students

Unlock the value proposition for Connected Insurance

We need to bridge the education gap for refugees, says new UNHCR report 

Greece’s future solely in the hands of Tsipras; he can direct the poor country any way he likes

Brexit: UK business fear of a no-deal scenario preparing for the worst

Further reforms in France can drive growth, improve public finances and boost social cohesion

These are the next big products in consumer technology

How female founders and investors are shaking up venture capital

Top officials say UN will support Bahamas’ rescue, relief efforts as Hurricane Dorian churns in Atlantic

Doctors are humans too: the benefits of embracing your mental status

6 charts that show how Japan’s economy stacks up as it enters a new era

Parliament to allow COVID-19 vaccines to be developed more quickly

What to know about the EU’s facial recognition regulation – and how to comply

Not enough resettlement solutions for refugees worldwide, says UN

3 reasons why AI won’t replace human translators… yet

Here’s how data can help us fix the climate

UN rights expert calls for end to ‘purgatory’ of ‘international inaction’ facing Myanmar’s remaining Rohingya

The European Parliament rewrites the EU budget in a bright day for the Union

Further reforms will move Slovakia toward a more innovative and inclusive society

Eurozone: Negative statistics bring deflation and recession closer

The fires in the Brazilian amazon rainforest may be related to the increase in the number of hospitalizations for respiratory complications in the state of PARÁ

Threatened by rising sea levels, the Maldives is building a floating city

Joint UN-Red Cross appeal to end rising sexual violence as a weapon of war

A few, or rather two, trade and economic alliances may rule our brave new world

This start-up is putting commercial air conditioning on ice to cool global warming

How to future-proof India’s economy

Fighting cybercrime – what happens to the law when the law cannot be enforced?

Here’s how drone delivery will change the face of global logistics

The future of global health is female

Water inequality used to be a developing world problem only. Not any more

Climate experts pledge to scale up high-altitude fight against mountain melt

Six steps that can help us to tackle homelessness

South Korea: A cherished partner for the EU

Future Healthworker’s role in 2030 Agenda

Ahead of State of the Union the European Youth Forum highlights lack of action on youth employment

Hackers can use public USB chargers to steal personal data. Here’s what you need to know about ‘juice jacking’

Somalia: UN congratulates Puntland region’s newly-elected President

The Role of Medical Workers in Fighting Covid-19 in Indonesia             

Digital technology helped create the skills gap. Here’s how it can help close it

What happens after you recover from coronavirus? 5 questions answered

Chart of the day: When do young Europeans leave home?

Refund for cancelled travel during the pandemic: Commission decides to refer SLOVAKIA to the Court of Justice

What slums can teach us about building the cities of the future

DR Congo: Ebola claims over 1,000 lives, Guterres commits ‘whole’ UN system, to help ‘end the outbreak’

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s