EU announces €37 billion Coronavirus investment initiative

The European Commission has adopted proposals to provide liquidity to the European economy as it tackles the “deep crisis” of the Coronavirus outbreak.

 

Margrethe Vestager, Ursula von der Leyen and Valdis Dombrovskis | Photo credit: Press Association

By Lorna Hutchinson

Lorna Hutchinson is Deputy Editor of The Parliament Magazine

13 Mar 2020


Commission President Ursula von der Leyen, in a joint press conference alongside Executive Vice-Presidents Margrethe Vestager and Valdis Dombrovskis, said that the Coronavirus was “not only dangerous for our health, but it is also hitting our economies.”

“The Coronavirus pandemic is testing us all – institutions, governments, health systems, economies, but most of all it is testing people. This is not only an unprecedented challenge to our healthcare systems, but it is also a major shock to our economies.”

“We have to take decisive and bold actions now, on all different levels. The shock is temporary, but we must all work together to ensure that it is as short and as limited as possible and that it does not create damage to our economies.”


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Von der Leyen said that in this vein, the Commission today adopted a €37 billion Coronavirus Response Investment Initiative, designed to support the European healthcare sector, the labour market and SMEs from all affected sectors.

She said that in addition, the EU budget will deploy its existing instruments to support SMEs with liquidity, complementing the measures taken at a national level.

She cited the example of the European Invest Fund, which will guarantee €8 billion in loans for 100,000 SMEs and small mid-caps.

“The measures announced today deal with the situation of today. This is an important economic package, but we have to acknowledge that the situation is evolving very fast. We stand ready to do more as the situation evolves. We will do whatever is necessary to support Europeans and the European economy."

"This is an important economic package, but we have to acknowledge that the situation is evolving very fast. We stand ready to do more as the situation evolves. We will do whatever is necessary to support Europeans and the European economy” Ursula von der Leyen

Commission Executive Vice-President Margrethe Vestager said that the Coronavirus crisis put “both lives and livelihoods at stake.”

“The outbreak of the COVID-19 affects every one of us. Businesses all over Europe, particularly the smaller ones, are struggling with the effects of actions that governments have had to take to slow down the spread of the virus.”

“Our goal is to make sure that businesses have the liquidity they need to keep operating and to make sure that the support reaches the companies that need it.”

Vestager said that many Member States were taking action and that the Commission would “give advice and share templates of schemes that work well.”

She said there were many ways that national governments could help businesses without needing state aid approval.

“They can give businesses breathing space to help them cope - providing wage subsidies, suspending corporate tax payments or the payment of VAT.”

But she noted that the EU would need to do more, adding, “the European rules on state aid enable governments to take effective action and give SMEs the urgent liquidity they need.”

"Businesses all over Europe, particularly the smaller ones, are struggling with the effects of actions that governments have had to take to slow down the spread of the virus" Margrethe Vestager

“We are ready to respond as we did in 2008 in the financial crisis. What matters right now is that we are prepared to move fast on new state aid to cope with the effects of the COVID-19 outbreak.”

Executive Vice-President Valdis Dombrovskis said that the crisis was “first and foremost a health emergency – the wellbeing of the people of our absolute priority,” but added, “this health emergency will have a significant economic impact.”

“Our economies are fundamentally solid and robust enough to withstand this temporary shock. We have all the tools at our disposal and we will use them fully.”

“One of our priorities today is to make sure that our companies have all the liquidity they need and that the jobs and incomes of affected workers are protected,” he added.

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