What Financial Aid European Union will Offer as a Covid-19 Recovery Solution
The COVID-19 pandemic has spread across Europe at an alarming rate. It has disrupted both the livelihoods of everyday people and the business operations of companies alike.
The European Union (EU), however, has stepped up to the call for assistance and has introduced programmes and grants to help local economies and citizens living in EU states. Much of this response is still ongoing, and many countries are set to receive more assistance in the coming months.
But how exactly do the different types of assistance work, and how are they helping the member states recover? What follows are just some of the many ways the EU has responded to the COVID-19 crisis and how assistance is being implemented throughout Europe.
SURE Loans (Employment/Business Aid)
The Support to mitigate Unemployment Risks in an Emergency (SURE) programme is aimed at supporting employment in Europe by providing around €100 billion in loans to EU member states. These loans can be used to support employment and businesses in different ways.
Companies that must lay-off employees or cut hours can receive financial assistance under this programme. This can not only help employees by providing paychecks for the hours not worked but can also assist the company itself for any lost wages due to the cutbacks. Each EU country decides how the funds will be best implemented.
Two rounds of SURE loans, totalling €90.3 billion in approvals, have so far taken place in 2020. While some disbursements have already been made in both October and November, more disbursements are expected based on approvals that have already been authorized.
Of the countries that applied and were approved for aid, the following ten received disbursements as of November 2020:
- Italy (€16.5 billion)
- Spain (€10 billion)
- Greece (€2 billion)
- Poland (€1 billion)
- Croatia (€510 million)
- Lithuania (€300 million)
- Cyprus (€250 million)
- Slovenia (€200 million)
- Latvia (€120 million)
- Malta (€120 million)
EUSF (General Assistance)
In 2002, the European Union Solidarity Fund (EUSF) was set up as a way to financially respond to natural disasters in member states. Since then, its coverage has been extended to include the COVID-19 pandemic.
As a result, countries affected by the pandemic can apply for aid when they need it. The EUSF also allows countries to apply for assistance in advance, before they may actually need the funds.
As of November 2020, just over €132.7 million has been approved by the Council of Ministers to be paid in advance to the following seven countries:
Some countries may use these funds to provide financial assistance for citizens to support unemployment or medical bills. Others may choose to allocate some of the aid into medical or state infrastructure to monitor the virus and slow its rate of transmission within the population.
European Guarantee Fund (Aid for Small to Medium-Sized Companies)
The European Investment Bank (EIB) has set up the European Guarantee Fund (EGF) to help businesses in EU states. Approved in May 2020, the process of approvals and disbursements is still ongoing as of November 2020.
According to kreditai.info, up to $200 billion in aid for small to medium-sized businesses is approved under the plan. Companies considered to be economically viable in the future, but that are currently struggling due to the pandemic, can receive loans through this fund.
While much of this programme is dedicated to helping private companies, the public sector is set to benefit from it as well.
Public sector and healthcare-related companies can not only apply for support due to the impact of COVID-19 but can also apply to use the funds for certain research projects related to the pandemic. In order to apply for loans, companies can apply through their local banks or other financial institutions for assistance.
Likelihood of More to Come
To date, the European Union has mounted an impressive financial response to the COVID-19 pandemic. Looking forward to the future, it’s likely that more proposals and forms of assistance may become available as the COVID-19 pandemic has yet to show any signs of abating in many European countries.