21 billion euro EU fund to finance ERTE ‘is now available’

2020/09/22 16:31:48 Written by Canarian Weekly Business

Spain will start to receive the 21.3 billion euros requested from Brussels to cover the ERTE "in the next few weeks". This was confirmed today (Tuesday) by the European Commissioner for the Economy, Paolo Gentiloni, via Twitter. In his message, he announced that all the Member States have given the necessary guarantees for the activation of this fund, known as SURE, and with a total endowment of 100 billion euros, "It is now available and ready," he posted.

The SURE, together with a recovery fund through the ESM (European Stability Mechanism) and the extension of a line of help to companies through the EIB (European Investment Bank), became the first response of the EU to the economic consequences of the pandemic, with a total of the package amounting to 540 billion euros.

The buffer program for financing temporary employment regulation files (ERTEs) became one of the main objectives of Spain. It made a request for a value of 20 billion euros to finance the costs of its national plans for labour regulation and support for the self-employed, although in August the European Commission confirmed a reserve for the country of 21.3 billion, the second highest amount behind Italy with 27.4 billion, which will benefit from the greater availability of funds.

The SURE is based on a debt issue to the markets that is articulated by the European Commission itself. A step that required the prior commitment of the members to provide guarantees worth 25,000 million euros based on their Gross National Income (GNI). The requirement has already been fulfilled: "All Member States have given bilateral guarantees, so that the SURE instrument is now available and ready," confirms the Commissioner for the Economy, who has communicated this to the German Finance Minister and Vice Chancellor, Olaf Scholz and the German presidency of the Council of the EU.

Brussels would thus be able to comply with the calendar that was marked more than a month ago, and that was specified in being able to make the first transfers of the fund this autumn, and the rest in 2021. The ERTE mechanism has spread throughout Europe to try to contain the unemployment drain caused by Covid-19. In the case of Spain, it compensates 70% for temporary loss of employment or reductions in working hours; in Italy coverage reaches 80%, and in northern European countries, such as the Netherlands, it can reach 100%.