Tuesday

2nd Jun 2020

Coronavirus

EU launches €100bn worker support scheme

  • Ursula von der Leyen: 'I think the European budget should be the 'Marshall Plan' we are laying out together as a European Union for the European people' (Photo: European Commission)

The president of the European Commission, Ursula von der Leyen, announced on Thursday (2 April) "a new solidarity instrument" of €100bn in financial assistance, in the form of loans, to support workers affected by the coronavirus outbreak.

This unemployment reinsurance mechanism named SURE would require member states to provide guarantees collectively amounting to at least €25bn based "on a voluntary basis".

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"The lockdown paralysed the demand and it paralysed the supply. If we do nothing […] we will lose markets and this will limit our recovery," warned von der Leyen.

"SURE can mitigate the effects of the recession, it keeps people in work, it enables companies to return to the market with renewed vigour," she added.

The support will be directed to where it is most urgently needed, but von der Leyen stressed that the scheme would be open to all 27 EU countries.

All member states already have some form of national short-time work schemes in place.

However, the commission's SURE proposal still needs to be approved by the EU Council.

After the north-south split over the 'coronabonds' this week, von der Leyen recalled that the northern countries already tried similar schemes in the past and had "very good experience" with it during the 2008 financial crisis.

"Many are calling right now for something which is called a 'Marshall Plan.' Well, I think the European budget should be the Marshall Plan we are laying out together as a European Union for the European people," said von der Leyen.

Von der Leyen said that EU institutions and member states have mobilised €2,770bn, what is "the largest answer to a European crisis ever given".

The commission is also proposing to redirect existing funds, such as the European Maritime and Fisheries Fund or the Common Agriculture Policy, to support fisherman and farmers.

Likewise, all uncommitted money from the three different Cohesion Policy funds will also be mobilised to respond to the negative economic impact of the coronavirus outbreak.

"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," von der Leyen said.

Additionally, a total of €3bn from the EU budget will be directed to support healthcare systems and professionals - of which €300 million will be allocated to support the EU's common stockpile of protective equipment and medical gear.

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