On 2 April, the European Commission proposed a package of measures to soften the blow of the coronavirus pandemic on the EU economy.
According to analysis from Reuters, the package includes a short-time work scheme and easier access to funds for farmers.
The Commission expects the EU to go into a deep recession this year as the pandemic slows economic activity to a crawl across the 27 members states.
“The depth and the breadth of this crisis requires a response unprecedented in scale, speed and solidarity,” the EU executive said in a document outlining the measures.
To prevent firms from laying off workers when there is not enough work, the Commission proposed that all EU countries adopt a German scheme under which employers cut working hours, not jobs, and the government pays for the difference in salaries, so that workers retain their spending power.
“[It] can benefit all the member states who want to use it,” Commission president Ursula von der Leyen told a news briefing.
To finance the plan, the Commission would borrow 100 billion euros on the markets against 25 billion euros in EU governments’ guarantees using its triple-A rating. It would then lend the money cheaply to member states, many of which have lower credit ratings.
Once asked by a government for help with wage subsidies, the Commission would verify how much extra that country was spending on the scheme and decide the terms of the loan, including the amount, the maximum average maturity and pricing.
A Commission proposal for a loan would then have to be approved by EU governments.
The Commission also proposed to increase cash advances to farmers under the EU’s Common Agriculture Policy and give them more time to apply for support.
The proposed measures, which still need the approval of the European Parliament and EU member states, will apply retroactively from 1 February and will be available until 31 December.