The European Comission has presented a proposal for a Regulation on a new temporary Support instrument to mitigate Unemployment Risks in an Emergency (SURE) aiming to address the impact of the COVID-19 epidemic and its socio-economic consequences in the Member States.
The proposal is part of a range of measures developed in response to the current COVID-19 pandemic such as the “Coronavirus Response Investment Initiative”, and it complements other instruments that support employment such as the European Social Fund and the European Fund for Strategic Investments (EFSI)/InvestEU.
SURE shall provide Union financial assistance up to EUR 100 billion in the form of loans from the Union to affected Member States.
The contingent liability arising from those loans from the Union will be made compatible with the EU budget constraints with guarantees from Member States to the Union budget, representing 25% of the loans granted provided by each Member State in line with their respective share in total Gross National Income of the Union.
SURE will be an additional financial assistance, coming on top of national measures and further to the regular grant support provided for similar purposes under the European Social Fund.
This proposed Regulation lays down the conditions and procedures enabling the Union to provide financial assistance to a Member State, which is experiencing, or is seriously threatened with, a severe economic disturbance caused by the COVID-19 outbreak for the financing of short-time work or similar measures aimed to protect employees and self-employed and thus reduce the incidence of unemployment and loss of income.
Mobilisation of Union financial assistance under the SURE instrument would be possible on a proposal by the Commission to the Council. The Member State concerned should request support. Before the Council grants financial assistance under the SURE instrument, the Commission should consult with the Member State concerned to assess the extent of the (realised or expected) sudden severe increase in public expenditure in the field of protection of employment.
A Member State may request Union financial assistance where its actual and possibly also planned public expenditure has suddenly and severely increased as of 1 February 2020 due to the adoption of national measures directly related to short time work schemes and similar measures to address the economic and social effects of the exceptional occurrence caused by the COVID-19 outbreak.
Specifically, the SURE instrument will act as a second line of defence, supporting short-time work schemes and similar measures, to help Member States protect jobs and thus employees and self-employed against the risk of unemployment.
The loan referred to in the proposal shall be disbursed in instalments and its characteristics shall be agreed in a Loan Agreement between the beneficiary Member State and the Commission. That agreement shall contain the provisions referred to in Article 220(5) of Regulation (EU, Euratom) 1046/2018.
As the instrument is of a temporary nature addressing the COVID-19 outbreak, the Commission should review every six months whether the exceptional circumstances causing the severe economic disturbances in Member States still exist.