SURE initiative

Definition

The SURE initiative (Support to mitigate Unemployment Risks in an Emergency) was presented by the European Commission on 2 April 2020 in the context of the COVID-19 pandemic. It is a financial instrument, allowing Member States to access loans at advantageous rates to finance a system of short-time work (STW) or support for the self-employed. According to the proposal, STW schemes are: ‘public programmes that allow firms experiencing economic difficulties to temporarily reduce the hours worked while providing their employees with income support from the State for the hours not worked.’

Background and status

The SURE initiative does not propose a harmonised STW system but rather a financial instrument that will provide, according to the European Commission, ‘up to €100 billion in loans to countries that need it to ensure that workers receive an income and businesses keep their staff’. It will allow people to continue to pay their rent, bills and food shopping and help ‘to provide much needed stability to the economy’. This instrument should encourage Member States to borrow from the Commission on advantageous terms compared with the rates they could obtain on the financial markets in order to finance their STW schemes or to support the self-employed. The regulation stipulates that each loan must be validated by the 27 Member States.

Benefits

By borrowing on the markets, the EU will benefit from more advantageous rates than can be obtained by some Member States. The initiative may not be accessed by countries like France or Germany, as they can borrow at lower rates – or even negative rates in the case of Germany. Unlike the European Financial Stabilisation Mechanism, which was activated during the debt crisis, this new scheme does not include any counterpart except the financing of a STW scheme; in other words, the loans are accessible without having to sign a memorandum containing counterparts in terms of economic policy. Despite this departure from European budgetary norms, the initiative was endorsed by the Eurogroup on 9 April 2020. The Council and the European Parliament must validate the text before its publication in the Official Journal of the European Union.

Emergency measure

The SURE initiative is an addition to the European Unemployment Reinsurance Scheme, which, through European solidarity, serves to finance unemployment schemes for Member States facing a sharp downturn in their labour market as a result of an external shock. This initiative was announced in the Commission’s 2020 work programme and, in a communication of 13 March 2020, the Commission indicated its willingness to accelerate work on it. The proposed SURE regulation confirms that:

this temporary instrument should be seen as an emergency operationalisation of a European Unemployment Reinsurance Scheme in the specific context of the COVID-19 crisis, without prejudice to the possible subsequent establishment of a permanent instrument under a different legal basis in the TFEU.

Reaction of the social partners

The SURE initiative received the full support of the European Trade Union Confederation, which called for:

clear guidelines to be issued as soon as possible to recommend that Member States set up short-time working or similar schemes in each country, to ensure that they cover all workers and enterprises, and that the social partners are involved in their design and implementation.

On 10 April 2020, the employer organisation BusinessEurope welcomed the Eurogroup agreement of 9 April via Twitter, with the message that ‘finance ministers have sent a clear signal of European solidarity, our commitment to the Euro, and to protecting our business eco-system and the jobs it supports through this crisis’.

Related dictionary terms

BusinessEurope; COVID-19 pandemicETUCEuropean economic governanceshort-time work

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