Vital financial steps to secure post-pandemic employment: European approach

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European program in temporary support to mitigate unemployment risks in emergency in the member states -popularly known as SURE – was aimed at mobilizing significant financial means to combat some negative posy-pandemic economic and social consequences. SURE already provided financial assistance of about €100 billion within just a couple of years (in the form of favorable loans granted to states) to address sudden increases in public expenditure for preservation of employment.

In the post pandemic period, SURE program has been a crucial element of the EU-wide strategy to protect jobs and workers in response to the coronavirus pandemic. SURE provided financial support in the form of loans granted on favourable terms to the states to finance national short-time work schemes and other similar measures, in particular for the self-employed, as well as health measures. It supported EU-wide about 31.5 million employees and self-employed people and over 2.5 million businesses. SURE effectively encouraged the states’ governance to set up wide-ranging and ambitious short-time work schemes and similar measures which allowed firms to retain employees, provide re-skilling and supported the self-employed.
Financial assistance within the SURE program was disbursed to 19 EU states, i.e. Belgium, Bulgaria, Cyprus, Estonia, Greece, Spain, Croatia, Hungary, Ireland, Italy, Lithuania, Latvia, Malta, Poland, Portugal, Romania, Slovenia, Slovakia and Czechia.

Short history
The Commission proposed the SURE Regulation in April 2020 as part of the EU-wide efforts to mitigate negative pandemic’s consequences; within an month it was adopted by the Council (on 19 May 2020) as a strong sign of European solidarity and became available after all the EU states signed guarantee agreements on 22 September 2020.
The first disbursement took place five weeks after SURE became available; all financial assistance granted under SURE has now been disbursed and no further financial assistance can be granted. In the beginning of December 2022, the EU issued its last bond under SURE, raising €6.55 billion through a 15-year social bond. This transaction brought the total funding raised under the program to €98.4 billion, out of a maximum funding envelope of €100 billion (available only until the end of 2022).
All SURE funds were raised through back-to-back issuance of SURE social bonds; with this financial mechanism, the EU has become one of the world’s most significant environmental, social, and governance-label issuers, with SURE social bonds accounting for 16% of global social bond issuance in 2021.

    The fifth bi-annual report on SURE appeared in the beginning of June 2023 as a final Commission’s monitoring report on SURE’s program; however the Commission will continue monitoring the repayment of the loans until all outstanding loans have been repaid.
Borrowing under the SURE program was instrumental for the growth of the EU into the large scale-sovereign style issuer. The Commission started issuing social bonds in October 2020, following the adoption of an independently evaluated Social Bond Framework. The framework is compliant with the Social Bond Principles of the International Capital Market Association (ICMA). The first SURE transaction was record-breaking, attracting an order book of €233 billion, the largest order book for any deal in the history of global bond markets.
Between October 2020 and December 2022, the Commission issued a total of €98.4 billion of social bonds in 9 issuances: i.e. the SURE program has become the world’s largest social bond scheme.
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Main program’s outcomes
Almost half of total expenditure was allocated to short-time work schemes, and almost one third allocated to similar measures for the self-employed.
Wage subsidy schemes and other similar measures accounted for 12%, while the remaining 5% was spent on health-related measures, which included preventive measures against COVID-19, additional labour costs to recruit and support healthcare workers, and the purchase of healthcare equipment and medication, including vaccines.
The EU member states covered by the program have saved an estimated €9 billion in interest payments by using SURE, thanks to the EU’s high credit rating; this adds to the positive effects on social and employment outcomes.

Commission’s opinion:
= “The program helped save millions of jobs during the COVID-19 pandemic and, as importantly, it supported EU businesses retain their workforce. SURE set the path for our recovery plan NextGenerationEU, which broke new ground in a successful, unified, economic European response to the crisis”.
Ursula von der Leyen, President of the European Commission.

= “At a time of immense hardship, SURE was a real EU success story, assisting quickly when it mattered most and also underpinning our post-pandemic economic recovery; it is an outstanding example of European solidarity at its best”.
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People.

    = SURE has not only been a crucial instrument in strengthening the EU’s resilience in response to the coronavirus pandemic by supporting more than 30 million people and 2.5 million enterprises across 19 member states. It has also been instrumental for the growth of the EU into a large scale-sovereign style issuer. By implementing common EU borrowing the Commission sent a very important signal to financial markets during the pandemic: it showed EU solidarity and has generated confidence in the strength of the euro area”.
Johannes Hahn, Commissioner for Budget and Administration.

    = “The pandemic came as a shock, and thanks to the EU’s quick reaction, the SURE instrument prevented an even deeper socio-economic crisis from unfolding. Our priority now is to ensure workers have the skills required on today’s labour market and can seize new opportunities”.
Nicolas Schmit, Commissioner for Jobs and Social Rights.

    = SURE’s success derived from three key factors: a) clearly defined purpose, b) its governance under the EU institutional framework, which ensured accountability and solidarity among the member states; and c) its robust financial construction. Besides, the success of SURE holds valuable lessons for the European future.”
Paolo Gentiloni, Commissioner for Economy
All citations from: 02/06/2023

    More information in the following Commission’s websites: = Fifth bi-annual report on the implementation of SURE; = SURE website; = Factsheet on SURE; = SURE Regulation; and = EU as a borrower website.




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