EU launches financial protection measures against coronavirus
The coronavirus outbreak has drastically changed the everyday life among the European Union, leaving countries with decreasing economic activities. As Member States are launching their national protection programmes, the EU intends to address this situation with specific measures and financial support to mitigate the loss and damage sustained.
As a quick response, on 26 March 2020 the European Parliament adopted the proposal of the “Coronavirus Response Investment Initiative” (“CRII”). The CRII involves mobilisation of available cash reserves in the EU Funds, by abolishing the refunding obligation of unspent EU subsidies. Moreover, the initiative contains proposal for releasing further investment liquidity. These two measures will reach up to approx. EUR 37 billion. This amount is to be distributed based on the quotas used for structural funds.
Soon after the adoption of CRII, the EU prepared a programme called Temporary Support to Mitigate Unemployment Risks in an Emergency (“SURE”) to protect employment in the EU, especially through the prevention of mass dismissals. SURE was developed after the German “Kurzarbeit”, in order to facilitate employers to apply short-term work schemes while granting the employees full-time salary. The difference would be covered from the loan granted by the EU, in return, Member States shall provide a guarantee for quarter of the amount granted by the EU.
Experts argue that there is no understanding among Member States how the virus should be tackled with, thus the acceptance of SURE or other protective measure may become questionable in the future.