Brussels launches new measures after the failure of the European Union summit
The EU proposes a € 100 billion fund to help Spain and Italy finance ERTE
The EU cannot afford a failed third summit of heads of government. And to prevent countries from leaving with empty pockets again, Brussels is preparing new proposals to address the social emergency, especially in Spain and Italy, and face the exit from the deep slump. Among them is a community unemployment reinsurance to finance temporary files . According to the draft regulation, to which EL PAÍS has had access, it is a “temporary” loan mechanism with a firepower of up to 100,000 million euros thanks to the endorsement of EU partners.
Brussels tries to combat the image of a Europe, at least, uncoordinated in the face of an emergency that the President of the European Commission, Ursula von der Leyen , described on Wednesday as “the greatest human tragedy within the Union since the two world wars”. Up to seven times, the draft regulation for this new instrument refers to that “spirit of solidarity” of the member states that they themselves have questioned by ugly restrictions on exports of medical devices or by the fierce debate over the Eurobonds.
The head of the Community Executive addressed this Wednesday almost exclusively to Spain and Italy, the two countries that suffer the most from the pandemic in Europe, but that last week also decided to hit the table to prevent the EU from falsely closing the Negotiation on a European plan to face the ” colossal shock ” that, in the words of the President of the Eurogroup Mário Centeno , is going through the euro zone. “We have developed a scheme to help Italy, Spain and all the countries that have been hit hard. And this will be done thanks to the solidarity of other Member States, ”stressed Von der Leyen in a video broadcast by the Commission.
The instrument, which is expected to be approved this Thursday, was claimed last week by the leader of the European socialists, Iratxe García, and encouraged by the Commissioner for the Economy, Paolo Gentiloni . It is a mechanism to be deployed immediately in the face of the avalanche of temporary layoffs that are taking place in the EU. The objective of this mechanism, according to the text, will be “to give assistance to the Member States” so that they can face “sudden increases” in public spending to preserve jobs. Von der Leyen explained that it is about states being able to finance aid so that workers do not stay out in the open while the crisis lasts and that they can recover their jobs when it ends.Therefore, it is not the European unemployment insurance that Von der Leyen promised to implement this legislature and that Spain and France have been demanding. However, it is a temporary solution that could now be more digestible in Berlin – where this folder divides the Government – or The Hague and that would allow States to turn to Brussels to finance temporary regulatory files to avoid massive job losses.
The draft regulation foresees providing this mechanism with up to 100,000 million euros that the Commission will obtain through issues once it has received guarantees for 25% of that amount from member countries. States will have to demonstrate that their public spending on unemployment benefits has skyrocketed as of February 1, 2020 due to the Covid-19 crisis . In addition, the first three beneficiary States may not receive more than 60% of all resources. Iratxe García welcomed this new instrument, although he warned that the Social Democrats “expect more.” “This loan to support workers should be the basis for an even more ambitious plan,” he said.
In the absence of countries launching a forceful joint response, the Commission continues to add new elements to its anti-crisis plan. The core, however, remains in how the way out of the crisis will be financed. Nine countries – including France and Spain – advocate cost sharing by issuing Eurobonds. French Finance Minister Bruno Le Maire proposed this Wednesday in an interview in the Financial Times the creation of a five or ten-year fund to obtain these resources for recovery.
Berlin, and also The Hague or Vienna, continue to reject this route. Even so, among the hawks, there is a perception that an alternative should be put on the table, even if the Netherlands returned with a proposal to create a fund to collect donations . The numbers two of the finance ministers resumed this Wednesday the work of the Eurogroup, where recourse to the lines of credit of the European rescue fund (ESM) is gaining strength. The discussion will be on the conditionality that the north wants to impose, although Berlin could lessen the pressure in that area.