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

Why flexible workspaces are the key to winning the talent war

“France will be there, it will always be there!”, French President Hollande says in a rather disorganised speech; the Sting reports live from World Economic Forum 2015 in Davos

Getting people with disabilities into work requires data

Business management: how can you introduce new ideas?

Trump’s Russophiles under investigation, Europe remains ‘en garde’

The new Kiev rulers ask $35 billion from the West

Coding in Namibia: UN supports young women’s computing career dreams

Healthcare’s a human right, not ‘a privilege for the rich’ UNAIDS argues at Davos

Why precision medicine is the future of healthcare

Medical students: catalysts to close the gender gap

New book honours UN women who made HERstory

Cameroon: Clear ‘window of opportunity’ to solve crises rooted in violence – Bachelet

Around 52 million in Near East, North Africa, suffering chronic undernourishment, new UN food agency report reveals

WEF Davos 2016 LIVE: The health of capitalism won’t be the only worry for those who head for Davos

Mergers: Commission approves Varta AG’s acquisition of Energizer’s divestment business, subject to conditions

Environmental labelling, information and management schemes are central to the circular economy

Negotiated two-State solution still ‘the only option’ for Palestine: Guterres

Air pollution: How to end the deaths of 7 million people per year

4 ways blockchain will transform the mining and metals industry

Pollution could be harming every part of your body. Here’s how

UN human rights ruling could boost climate change asylum claims

A Sting Exclusive: “The competitiveness of Europe depends on a digital single market”, EPP President Joseph Daul highlights live from European Business Summit 2015

Mergers: Commission opens in-depth investigation into proposed acquisition of Transat by Air Canada

MEPs want ambitious funding for cross-border projects to connect people

WHO chief underscores need to address climate change following visit to Bahamas

Humanitarian aid: €7 million for disaster preparedness in Southern Africa and Indian Ocean region

2018 Golden Pen of Freedom Awarded to Maria Ressa of the Philippines

Who is first (and last) in the race to build a workforce fit for the future?

We won’t win the online security war without people power

4 ways the circular economy can help heavy industry reduce emissions

EU prepares a banking union amidst financial ruins

A ‘strong and united Europe’ has never been more needed, declares UN chief Guterres

Here are five ways we can make mental healthcare better

Guterres expresses ‘grave concern’ following explosion at large political rally for reform-minded Ethiopian Prime Minister

Coronavirus: Commission concludes exploratory talks with Valneva to secure a new potential vaccine

2013, a Political Odyssey: What future for Italy?

3+1 issues to haunt tomorrow’s EU Summit

‘Good enough’ global cooperation is key to our survival

5 amazing schools that will make you wish you were young again

FROM THE FIELD: Finding refuge in the ‘beautiful game’

There is a forgotten solution to climate change that we must invest in – nature

Coronavirus: a Disease that spreads as fastly as its fake news

How data is transforming the way we care for the ocean

This German supermarket’s shelves are filled with food other stores won’t sell

How trust and collaboration are key in India’s last mile response to the COVID-19 crisis

The European Sting writes down the history LIVE from G20 Leaders’ Summit in Turkey

At UN, Middle East countries discuss steps towards regional nuclear-free zone

Banking package: Parliament and Council reach an agreement

Coronavirus vs flu: how do they compare?

Autumn 2020 Economic Forecast: Rebound interrupted as resurgence of pandemic deepens uncertainty

Globally, youth are the largest poverty-stricken group, says new UN report

How a bionic arm is helping one little girl enjoy the things most take for granted

If you build it, they will come: Why infrastructure is crucial to tourism growth and competitiveness

7 steps to becoming a ‘CEO Academy’

Towards the Rise of the United States of the Atlantic?

How personalized care can tackle the late-life loneliness epidemic

Vaccines: contract between European Commission and AstraZeneca now published

There is no greater sorrow on earth than the loss of one’s native land

Are we letting politicians play with migrants’ health?

Mobile technology facilitating social distance in the middle of a pandemic

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