EU announces new measures to help revive economies amid coronavirus outbreak

The measures include a short time work scheme, SURE, to help economies in the European Union. Also, there will be schemes to help farmers and fishermen

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The European Commission on Thursday proposed a set of measures including a state-supported short time work scheme called SURE to help countries and economies in the European Union (EU)that have been suffering owing to the coronavirus outbreak. The state-supported short time work scheme SURE is aimed at helping businesses that are struggling to pay wages and retaining workers and are instead going for layoffs.

The proposed set of measures includes schemes that will give farmers and fishermen easy access to funds. The EU economy has been battered by the coronavirus outbreak with countries like Italy, Spain and Germany suffering the most. With no other option left, companies are going for layoffs, which now are an equally big concern as the coronavirus outbreak.

New measures to help EU economy

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European Commission president Ursula von der Leyen in a video address said on Thursday that the idea behind SURE is simple. "If there are no orders and companies run out of work because of a temporary external shock like corona, they should not lay-off their workers. They continue to employ them even if there is less work." The commission also proposed that all 27 EU member countries should adopt a German scheme to help their workers.

Under the scheme, employers are cutting work hours but not jobs. The difference in salaries is paid by the government so that the workers retain their spending power. In order to execute the plan, the commission will initially borrow 100 billion euros on the markets against 25 billion euros in EU governments' guarantees by using its triple-A rating. Following that, the money will be lent at cheaper rates to member states.

If a government asks for loan to pay wage subsidies, the commission will then verify how much that particular member country was spending on scheme, following which it will decide the terms of the loan. Von der Leyen also said that the idea is to prevent as many job losses as possible. The scheme is particularly aimed at countries like Italy and Spain. The coronavirus outbreak has so far hurt Italy and Spain the most in Europe.

Fishermen, Framers to benefit

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The new set of schemes will also help farmers and fishermen under the EU's Common Agriculture Policy. An increase in cash advances along with more time to apply for support has been proposed by the commission. Per the new set of measures, all fishermen under the European Maritime & Fisheries Fund will be given 75% compensation for temporary loss of work. The rest will be met by the respective governments.

Similar schemes will also include smaller businesses and salmon farms. Also, the commission came up with a proposal of waiving all kinds of national co-financing that is generally required when countries receive money from the EU for constructing infrastructure projects such as roads and bridges, making the projects fully paid for by the bloc. However, the proposed measures need to be passed by the European Parliament and approved by EU member states. Once done, it will be applicable retroactively from February 1 and will be available till December 31.

This article was first published on April 2, 2020
Related topics : Coronavirus