This support, in the form of loans granted on favourable terms, will assist these Member States in addressing sudden increases in public expenditure to preserve employment. Specifically, they will help cover the costs directly related to the financing of national short-time work schemes, and other similar measures they have put in place as a response to the coronavirus pandemic, in particular for the self-employed.
The SURE instrument can provide up to €100 billion in financial support to all Member States. The Council has so far approved €87.9 billion in financial support under SURE to 17 Member States, based on the Commission’s proposals. The next disbursements will take place over the course of the months ahead, following the respective bond issuances.
The disbursements follow last week’s inaugural social bond issuance by the Commission, marked by very strong investor interest, to finance the instrument.
Members of the College said:
President Ursula von der Leyen said: “The first disbursements under the SURE instrument are important milestones in our push to preserve jobs and livelihoods. They clearly demonstrate Europe’s solidarity with citizens in Spain, Italy and Poland affected by this unprecedented crisis. We remain committed to protecting people and jobs across Europe. SURE will play an important role in achieving this objective.”
Johannes Hahn, Commissioner in charge of Budget and Administration, said: “With the Sure instrument we have managed to live up to our citizens’ expectation regarding quick delivery of support in times of crisis. I am glad to see that citizens and enterprises in Spain, Italy, Poland will be the first to benefit. 17 Member States have already declared their interest in receiving support from SURE and we will follow-up on this still this year. This is solidarity in action.”
Paolo Gentiloni, Commissioner for Economy, said: “Today marks an important milestone for European solidarity as the first financing flows to our Member States: 17 billion euros to support workers in Italy, Spain and Poland. This is only the beginning. As Europe prepares to face a difficult winter, let’s remember that last week’s SURE Social Bonds issuance was more than a successful market operation – it was a huge vote of confidence in the European Union’s recovery plan and in our common economic future.”
On 21 October, the European Commission issued a €17 billion inaugural social bond under the SURE instrument. The issuing consisted of two bonds, with €10 billion due for repayment in October 2030 and €7 billion due for repayment in 2040. There was very strong investor interest in this highly rated instrument, and the bonds were more than 13 times oversubscribed, resulting in favourable pricing terms. The terms on which the Commission borrows are passed on directly to the Member States receiving the loans.
The bonds issued by the EU under SURE benefit from a social bond label. This provides investors in these bonds with confidence that the funds mobilised will serve a truly social objective.