Today, the European Union has shown that it is able to deliver solutions and implement the decisions we took a few weeks ago.
First of all, we finalised the ESM Pandemic Crisis Support, which is now available and ready for use. It is, as you know, favourable financing worth 2% of each euro area Member State’s GDP. The only condition – I repeat, the only condition – for using this credit line is that the money has to be used for direct and indirect healthcare costs. All documentation related to this support is publically available. Nothing is hidden. Now it is for each government to decide whether they wish to apply for this support.
Second, we have delivered for workers. The ambassadors in Coreper reached an agreement today. This mechanism, SURE, will become law when formally adopted by written procedure on Tuesday. SURE unlocks €100 billion to help workers keep their jobs. Yesterday, we saw that another three million American workers had lost their jobs, bringing the total to 36 million since the start of the crisis. European labour markets are far from perfect, but they do have their strengths. Schemes like the Cassa Integrazione, Kurzarbeit, Chomage partiel or other similiar schemes in other Member States are certainly among them. So it’s great news that they can count on this support from the European Union.
For SURE to be fully operational, we need Member States to sign the guarantees that will enable the Commission to raise the necessary funds on the markets. We count on all actors to ensure that these steps can be completed as swiftly as possible.
Further progress is needed on the EIB European Guarantee Fund. The Commission strongly supports the efforts over this last mile.
Today Eurostat issued its flash estimate for GDP growth in the first quarter of the year, which was remarkably close to our Spring Forecast. For the European Union, the flash estimate was -3.3% growth and, for the euro area, -3.8% growth. Of course, the hit to growth in the second quarter is clearly going to be a lot worse. All incoming data confirms that the shock we are experiencing is indeed without precedent. That’s why our response also needs to be of a magnitude that is without precedent to support affected sectors and geographical areas, to have a level playing field in the single market, and to avoid excessive divergences amongst Member States.
The Commission is working hard to prepare a proposal for a recovery fund linked to the next Multiannual Financial Framework. This is a complex exercise but we will be ready to present our proposal in the last week of May. The debate that we has today in the Eurogroup is very helpful for the Commission in finalising this exercise. As President von der Leyen said yesterday in the European Parliament, the recovery fund will be built on three pillars.
First, supporting Member States to recover from the crisis, with a recovery and resilience tool which will account for the bulk of the funding, to support investment and reforms created to fund key public investment and reforms aligned with our European priorities, notably the green and digital transitions.
Secondly, helping to mobilise private investment, which we expect to drop by around €800 billion in 2020 to 2021 compared to what was forecast before the crisis. This is essential to support strategic sectors and technologies and help companies facing solvency risks.
And finally, learning the most immediate lessons of the crisis, we will strengthen programmes that have proven their value in the crisis, such as RescEU, as well as creating a new, dedicated health programme.
I know that you are all impatient to know how much money will be put on the table, the balance between loans and grants, and so on. These are issues we have discussed in the Eurogroup. What I can tell you is there plenty of determination in the Commission to present a proposal that is as ambitious as the situation demands.
And of course we are aware that ambition is also expected by the European Parliament, which has adopted a very clear resolution in that sense, as we heard from Irene Tinagli in our exchange with her this afternoon.
We must continue to deliver the solutions that our citizens need, to ensure that no part of Europe is left alone that the crisis does not undermine the Single Market and worsen divergence in the euro area.