EU creates €37bn emergency fund for at-risk sectors hit by coronavirus

13 Mar 20201.34k Views

Share on FacebookTweet about this on TwitterShare on LinkedInPin on PinterestShare on RedditEmail this to someone

Ursula von der Leyen, president of the European Commission. Image: Etienne Ansotte/European Union

Share on FacebookTweet about this on TwitterShare on LinkedInPin on PinterestShare on RedditEmail this to someone

The European Commission has established a multibillion-euro fund to help businesses that will be hit hardest by the coronavirus pandemic.

In the face of the rapid spread of the coronavirus – and the resulting economic damage posed by the closure and imposed isolation of large populations – the European Commission (EC) has announced a new emergency fund.

The EC said it will use “all the instruments at its disposal” to ensure supplies to health systems are maintained in the single market, support people whose jobs might be severely impacted by containment measures and aid member states financially. A package worth €37bn has been created to aid in this effort.

The EC also said that it has proposed to relinquish the obligation for member states to refund unspent pre-financing for structural funds, which is estimated to amount to €8bn. This will allow member states to supplement €29bn of structural funding across the EU.

The European Globalisation Adjustment Fund has up to €175m available to mobilise support for dismissed workers and the self-employed. For hard-hit SMEs, €1bn will be directed from the EU budget to incentivise banks to provide them loans.

Support Silicon Republic

To protect workers from unemployment and loss of income, the EC said it is trying to accelerate the creation of a European unemployment reinsurance scheme as well as a European social fund to support workers and healthcare.

‘A major shock for our economies’

Furthermore, it has been proposed that the scope of the EU Solidarity Fund – set up to respond to major natural disasters on the continent – should be expanded to the impending public health crisis if needed for the hardest hit member states, with up to €800m available this year.

Airlines are also likely to receive some leeway when it comes to committing to flights. The rule that requires an airline to use at least 80pc of its airports slots within a given period or face losing them the following year is expected to be temporarily lifted. The existing rule has meant airlines have flown largely empty flights to destinations in recent weeks.

President of the EC, Ursula von der Leyen, said in a statement: “The coronavirus pandemic is testing us all. This is not only an unprecedented challenge for our healthcare systems, but also a major shock for our economies.

“The important economic package announced today deal with the situation of today. We stand ready to do more as the situation evolves. We will do whatever is necessary to support the Europeans and the European economy.”

Colm Gorey is a senior journalist with Siliconrepublic.com

editorial@siliconrepublic.com