On 13 March the European Commission presented a general framework for measures to mitigate the socio-economic impact of the COVID-19 infection, based on coordinated action at European level. More information and decisions for concrete measures are expected in the coming weeks.
At a glance
- 1 billion Euro liquidity support for SMEs
- Promotion of reduced working time and improving of qualification of the workforce
- Coronavirus Investment Initiative
- Guidelines for optimization of trade and industry
Mobilizing the EU budget
To bring immediate assistance to the small and medium-sized enterprises (SMEs) affected, EUR 1 billion will be redirected from the EU budget in the coming weeks to incentivize banks to provide liquidity to SMEs and midcaps. At least 100,000 European SMEs and small midcaps will be supported with funding of around € 8 billion. It is also planned to provide “credit holidays” to the existing debtors that are negatively affected.
Alleviating the impact on employment
The Commission stands ready to support Member States in this, promoting, in particular short-time work schemes, up- and re-skilling programs. The Commission will accelerate the preparation of the legislative proposal for a European Unemployment Reinsurance Scheme aiming at supporting Member State policies that preserve jobs.
The European Globalization Adjustment Fund could also be mobilized to support dismissed workers and those self-employed with up to EUR 179 million.
The Coronavirus Investment Initiative
The Coronavirus investment initiative will target health systems, SMEs, labor markets, other vulnerable segments of European economies. The Commission proposes to direct € 37 billion to fight the crisis, and to relinquish this year its obligation to request Member States to refund unspent pre-financing for the structural funds – around EUR 8 billion. Member States will be required to use these funds to accelerate their investments under the Structural Funds and to use them for co-financing at national level. The estimated EUR 7.5 billion will contribute to the allocation of structural funding of around EUR 17.5-18 billion across the EU.
Regarding trade and industry the possibility of switching to alternative suppliers, the existence of stocks or the reliance on just-in-time production processes are foreseen.