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Nine Member States receive €14bn loans to overcome their Covid-19 spending




Nine Member States receive €14bn loans to overcome their Covid-19 spending
EU. On Tuesday 2 February 2021, the European Commission disbursed loans totalling €14 billion to nine Member States. "The pandemic continues to weigh on our economies and, while we can see the light at the end of the tunnel, we do not yet know how long it will take us to reach it. This is why the SURE instrument and the European solidarity it represents are so important", stresses Paolo Gentiloni, European Commissioner for the Economy.

The money, from the fourth social bond issue under the EU's SURE (Support to mitigate unemployment risks in emergency) instrument, will be used to help them "cope with the sudden increase in public spending to preserve jobs. More specifically, it will help Member States cover the costs directly related to the financing of national short-time working schemes and other similar measures they put in place in response to the coronavirus pandemic, including for the self-employed," says a European Commission press release.

Italy (€4.45bn), Poland (€4.28bn), Belgium (€2bn), Spain (€1.03bn), Slovenia (€913m), Greece (€728m), Hungary (€304m), Cyprus (€229m) and Latvia (€72m) will benefit from the €14bn released.

53.5 bn out of the €90.3 bn already paid out

The subscription by the European Commission of these two bonds on 27 January 2021 attracted "considerable investor interest", as the EU points out, and was carried out at favourable price conditions. The first €10bn seven-year bond was raised at a negative rate of -0.497% and the second (€4bn over 30 years) at a rate of 0.134%.

These exceptional loan conditions will be passed on directly to the beneficiary Member States.

To date, the SURE instrument has enabled a total of €53.5 bn to be disbursed to 15 countries* out of the €90.3 bn already programmed for 18 Member States. "Under the SURE programme, the Union has mobilised up to €100 billion in loans for EU Member States to protect and maintain employment. The funds are regularly made available to our Member States to help them financially to mitigate the effects of the coronavirus pandemic", comments Ursula von der Leyen, President of the European Commission.

"After this successful fourth bond issue under SURE, we have now disbursed more than half of the SURE funds (...) We will rapidly implement the rest of the programme in order to provide all authorised funds to the 18 Member States that have so far requested financial support under SURE", adds Johannes Hahn, European Commissioner for Budget and Administration.

*Italy, Spain, Poland, Greece, Croatia, Lithuania, Cyprus, Slovenia, Malta, Latvia, Belgium, Romania, Hungary, Portugal and Slovakia.

 


Eric Apim


Tuesday, February 2nd 2021



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