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Brussels plans EUR 100 billion coronavirus solidarity fund

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Brussels plans EUR 100 billion coronavirus solidarity fund

Ursula von der Leyen - Photo EC

(BRUSSELS) - The EU Commission proposed to set up a EUR 100 bn coronavirus solidarity fund Thursday, to help businesses stay afloat and workers keep incomes, and redirect structural funds to coronavirus response.

Farmers and fishermen will also receive support, as will the most deprived. All of these measures are based on the current EU budget and will squeeze out every available euro. They show the need for a strong and flexible long-term EU budget. The Commission will work to ensure that the EU can count on such a strong budget to get back on its feet and progress on the path to recovery.

The coronavirus outbreak is testing Europe in ways that would have been unthinkable only a few weeks ago. The depth and the breadth of this crisis requires a response unprecedented in scale, speed and solidarity.

In the past weeks, the Commission has acted to provide Member States with all the flexibility they need to support financially their health care systems, their businesses and workers. It has acted to coordinate, speed up and reinforce the procurement efforts of medical equipment and has directed research funding to the development of a vaccine. It has worked tirelessly to ensure that goods and cross-border workers can continue to move across the EU, to keep hospitals functioning, factories running and shop shelves stocked. It has and continues to support the repatriation of EU citizens, their families and long-term residents to Europe from across the world.

In doing this, the Commission is acting on its conviction that the only effective solution to the crisis in Europe is one based on cooperation, flexibility and, above all, solidarity.

Commission president Ursula von der Leyen said that every available euro in the EU budget would be redirected to address the coronavirus: "With a new solidarity instrument, we will mobilise €100 billion to keep people in jobs and businesses running. With this, we are joining forces with Member States to save lives and protect livelihoods. This is European solidarity."

The SURE initiative is a new instrument that will provide up to €100 billion in loans to countries that need it to ensure that workers receive an income and businesses keep their staff. This allows people to continue to pay their rent, bills and food shopping and helps provide much needed stability to the economy.

The loans will be based on guarantees provided by Member States and will be directed to where they are most urgently needed. All Member States will be able to make use of this but it will be of particular importance to the hardest-hit.

SURE will support short-time work schemes and similar measures to help Member States protect jobs, employees and self-employed against the risk of dismissal and loss of income. Firms will be able to temporarily reduce the hours of employees or suspend work altogether, with income support provided by the State for the hours not worked. The self-employed will receive income replacement for the current emergency.

There would also be a Fund for European Aid to the Most Deprived, the use of electronic vouchers would reduce the risk of contamination will be introduced, as well as the possibility of buying protective equipment for those delivering the aid.

For fishermen and farmers, who have been hit hard by the crisis, in turn hitting our food supply chains and the local economies that the sector sustains, the use of the European Maritime and Fisheries Fund will be very flexible. Member States will be able to provide support:

  • to fishermen for the temporary cessation of fishing activities;
  • to aquaculture farmers for the temporary suspension or reduction of production and provide support;
  • and to producer organisations for the temporary storage of fishery and aquaculture products.

The Commission will also shortly propose a range of measures to ensure that farmers and other beneficiaries can get the support they need from the Common Agricultural Policy, for example by granting more time to introduce applications for support and more time to allow administrations to process them, increasing advances for direct payments and rural development payments, and offering additional flexibility for on-the-spot checks to minimise the need for physical contact and reduce administrative burden.

Finally, the Commission has decided that all uncommitted money from the three Cohesion Policy funds – the European Regional Development Fund, the European Social Fund and the Cohesion Fund - will be mobilised to address the effects of the public health crisis.

To make sure that funds can be re-directed to where they are most urgently needed, transfers between funds as well as between categories of regions and between policy objectives will be made possible. Moreover, co-financing requirements will be abandoned, as Member States are already using all their means to fight the crisis. Administration will be simplified.

€3 billion will also be put into the Emergency Support Instrument, of which €300 million will be allocated to RescEU to support the common stockpile of equipment. The first priority would be managing the public health crisis and securing vital equipment and supplies, from ventilators to personal protective gear, from mobile medical teams to medical assistance for the most vulnerable, including those in refugee camps. The second area of focus would be on enabling the scaling up of testing efforts. The proposal would also enable the Commission to procure directly on behalf of the Member States.

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