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.

Advertising

the sting Milestone

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

EU cracks under the weight of its policy on the Ukraine-Russia nub

EU Commission spends billions without achieving targets

South Eurozone countries threatened by rising borrowing cost and expensive euro

While EU Open Days 2013 discuss the 2020 strategy, Microsoft shares a glimpse of EU 2060

There are more than 1 billion guns in the world and this is who owns them

How tomorrow’s buildings will make you – and the planet – healthier

This man is turning cities into giant sponges to save lives

European Commissioner for Youth wants young people to be at heart of policy making

State aid: Commission approves €50 million Italian support scheme for production and supply of medical equipment and masks during Coronavirus outbreak

Which countries’ workers spend the longest (and shortest) in retirement?

A new era of computing is coming. How can we make sure it is sustainable?

New EU rules ensure better protection for 120 million holidaymakers this summer

Draghi tells the Parliament the ECB to use all its weaponry; euro slides to parity with the dollar

Lessons from the Global Entrepreneurship Index

Palestine refugee agency chief resigns amidst mismanagement probe

Why Climate Change Matters for Future Health Professionals

First do no harm. Why healthcare needs to change

‘Summon the spirit of San Francisco’, says General Assembly President on UN Charter anniversary

Malta and Slovakia: serious shortcomings in the rule of law

EU mobilises €21 million to support Palestine refugees via the UN Relief and Works Agency

This is what happened to CO2 emissions in the EU last year

Drinking water: new plans to improve tap water quality and cut plastic litter

INTERVIEW: ‘Defend the people, not the States’, says outgoing UN human rights chief

Japan to invest in euro values

Khashoggi trial in Saudi Arabia falls short of independent, international probe needed: UN rights chief

Theresa May expresses her optimism about Britain’s economic success while UK business outlook seems ominous

MEPs Anti-fraud votes for more votes?

European Young Innovators Forum @ European Business Summit 2014: Europe for StartUps, vision 2020

The economic effects of the COVID-19 coronavirus around the world

Tenants ‘forced out their homes’ by global investment firms, say UN experts

EU Commission: Once in every 20 beef meals you eat…horse probably with drugs in it

Women’s leadership ‘critical’ to future of Niger

A Sting Exclusive: “China-Africa Cooperation Sets a Fine Example of South-South Cooperation”, by China’s Ambassador to EU

A Sting Exclusive: “Junior Enterprises themselves carry out projects focusing on the environment”, JADE President Daniela Runchi highlights from Brussels

Commission reinforces tools to ensure Europe’s interests in international trade

EU unfolds strategy on the Egypt question

1 in 4 Africans had to pay a bribe to access public services last year

Parliament gives green light to EU-Singapore trade and investment protection deals

The Juncker Plan at work: bringing investment back on track in Europe

Why city residents should have a say in what their cities look like

Respect people’s peaceful assembly and fair trail rights, UN human rights wing urges Nicaragua

Rule of Law: The Commission opens a debate to strengthen the rule of law in the EU

Can China deal with climate change without the U.S.?

As ride-hailing firms drive into the future, who is being left behind?

Coronavirus: Commission waives customs duties and VAT on the import of medical equipment from non-EU countries

You can live up to 10 years longer by doing these 5 things

Solitary Britain sides with US aggressing Russia and chooses hard Brexit

Landmark agreement will protect 100 European Geographical Indications in China

Hardware is a cybersecurity risk. Here’s what we need to know

At this Italian bookshop, children swap their recycling for something to read

How music can help children with autism connect

UN General Assembly celebrates 20 years of promoting a culture of peace

34 million Americans know someone who died after being unable to pay for medical treatment

Residents and visitors to this Dutch neighborhood could share a pool of cars and bikes

‘A global measles crisis’ is well underway, UN agency chiefs warn

Draghi reveals how failing banks will be dealt, may cut interest rates soon

We must stop turning a blind eye to the world’s health crises

Draghi hands over to banks €77.7 billion more

This Netherlands football stadium creates its own energy and stores it in electric car batteries

UNICEF must triple budget to combat Ebola outbreak in DR Congo; complex crisis impacting unprecedented number of children

More Stings?

Advertising

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