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(BRUSSELS) – As the second COVID wave hits Europe hard, the EU Commission Tuesday disbursed some EUR 14 billion to nine EU countries in the second instalment of loans to help finance short-time work schemes.
As part of the operations, Croatia is receiving 510 million, Cyprus 250 million, Greece 2 billion, Italy an additional 6.5 billion, Latvia 120 million, Lithuania 300 million, Malta 120 million, Slovenia 200 million and Spain an additional 4 billion.
This support, in the form of loans granted on favourable terms, will assist these EU Member States in addressing sudden increases in public expenditure to preserve employment. Specifically, they will help cover costs directly related to the financing of national short-time work schemes, and other similar measures they have put in place as a response to the coronavirus pandemic, including for the self-employed.
The social bonds were issued for the second time under SURE on 10 November, for a total value of 14 billion – consisting of two bonds, with 8 billion due for repayment in November 2025 and 6 billion due for repayment in November 2050. The issuance received an overwhelming response in the capital markets and the bonds were 13 and 11.5 times oversubscribed, respectively for the 5- and 30-year tranche, resulting in favourable pricing terms for both bonds. The terms on which the Commission borrows are passed on directly to the beneficiary Member States.
At the end of October, Italy, Spain and Poland received a total of 17 billion under the EU SURE instrument. Once all SURE disbursements have been completed to the 9 countries receiving financial support today, Croatia will receive 1 billion, Cyprus 479 million, Greece 2.7 billion, Italy 27.4 billion, Latvia 192 million, Lithuania 602 million, Malta 244 million, Slovenia 1.1 billion and Spain 21.3 billion.
The SURE instrument can provide up to 100 billion in financial support to all Member States. The Commission has so far proposed to make 90.3 billion in financial support available to 18 Member States. The next disbursements will take place over the course of the months ahead, following the respective bond issuances.
The bonds issued by the EU under SURE benefit from a social bond label. This provides investors with confidence that the funds mobilised will serve a truly social objective.
