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, including for the self-employed.
With today’s disbursement, 15 Member States have received around €40 billion under the EU SURE instrument between the end of October and the end of November. Once all SURE disbursements have been completed, Belgium will have received €7.8 billion, Hungary €504 million, Portugal €5.9 billion, Romania €4.1 billion and Slovakia €631 million.
Today’s disbursement follows the third issuance of social bonds under the EU SURE instrument, which was over 13 times oversubscribed. This was translated into favourable pricing terms, meaning that Member States will receive more in loans than they will have to repay.
The SURE instrument can provide up to €100 billion in financial support to all Member States. The Commission has so far proposed to make €90.3 billion in financial support available to 18 Member States. The next disbursements will take place over the course of the months ahead, following the respective bond issuances.
Members of the College said:
President Ursula von der Leyen said: “Our priority is to save people’s lives, and also their livelihoods. The EU is mobilising €100 billion in loans for EU countries to finance short-time work schemes. This will provide support to our companies and help keep people employed. Today, another five Member States are receiving funding via SURE, and 15 have benefitted so far. More countries will be able to benefit soon.”
European Commissioner Johannes Hahn, in charge of Budget and Administration, said: “With the third successful SURE issuance this year, we have provided 15 Member States with around €40 billion to support them with alleviating the social impact of the current COVID pandemic. This support will help businesses to keep their staff employed. The SURE programme is evidence of the EU’s commitment to provide Member States quickly with the urgently needed financial means to overcome this crisis. The labelling as social bonds is a guarantee for investors that the money will be invested in social and sustainable projects, thus blending financial transactions with our political priorities”.
Paolo Gentiloni, Commissioner for Economy, said: “After the third hugely successful issuance of SURE social bonds last week, today we distribute another €8.5 billion to help workers and companies in five Member States. The social impact of the COVID crisis would have been so much worse without European countries’ strong safety nets, especially short-time work schemes. I’m proud that through SURE, the European Commission is actively supporting these schemes and similar measures for the self employed – helping millions of our citizens to navigate these hard times.”
Background
On 24 November, the European Commission issued the third social bond under the EU SURE instrument, for a total value of €8.5 billion. The issuing consisted of one single tranche due for repayment in July 2035.
The issuance has received an overwhelming response in the capital markets. It has attracted the largest-ever order book for any single tranche benchmark issuance and is the largest 15-year deal size by a supranational issuer to date. The favourable pricing terms that resulted from the high investors’ interest are directly being passed on 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.
