1. What is the SURE instrument and why is it proposed by the European Commission?
SURE (Support to mitigate Unemployment Risks in an Emergency) aims to protect jobs and workers affected by the coronavirus pandemic.
2. What is the objective of this new instrument?;
This support will be offered to EU member states in the form of loans so that they can cope with any sudden increase in public expenditure on maintaining employment. In particular, these loans will help members cover the costs directly linked to the creation or extension of national part-time systems and other similar measures they have introduced for the self-employed in response to the current coronavirus pandemic.
3. Why is the Commission focusing on supporting part-time systems?
Many companies facing difficulties are forced to temporarily suspend or significantly reduce the activities and working hours of their employees. By avoiding unnecessary dismissals, part-time schemes can prevent the most serious and long-term negative consequences of a temporary shock to the economy and the labor market in the member states. In this way, they help maintain the family incomes as well as productive capacity and the human capital of enterprises and the economy as a whole.
4. How will the Commission secure and provide funding for the SURE instrument?
Financial assistance under the SURE instrument will take the form of a loan from the EU to the member states seeking support. To finance such loans, the Commission will resort to borrowing from the financial markets. The Commission will then provide the loans to the member states on favorable terms. Member states will therefore benefit from the EU's strong credit rating and low borrowing costs. The loans will be supported by a system of voluntary guarantees which the member states will undertake vis-a-vis the EU. The instrument will be operational once all member states have committed themselves to these guarantees.
5. How much money will be allocated to the EU in total and how much to Cyprus?
Up to € 100 billion in total will be available in the form of soft loans from the EU to the member states. Cyprus will receive €479 million in financial support to cope with the sudden increase in spending and to maintain employment.
6. How can an enterprise benefit?
When it receives funding, it is up to the government to set out the detailed framework and process by which companies can apply for funding through government employment support schemes.
Charalambos Chrysostomou
Head of Europe Direct Limassol
Cyprus University of Technology
