Saving lives and supporting livelihoods in these times of acute crisis is paramount. The Commission is further increasing its response by proposing to set up a €100 billion solidarity instrument to help workers keep their incomes and help businesses stay afloat, called SURE. It is also proposing to redirect all available structural funds to the response to the coronavirus.
Farmers and fishermen will also receive support, as will the most deprived. All of these measures are based on the current EU budget and will squeeze out every available euro. They show the need for a strong and flexible long-term EU budget. The Commission will work to ensure that the EU can count on such a strong budget to get back on its feet and progress on the path to recovery.
The coronavirus outbreak is testing Europe in ways that would have been unthinkable only a few weeks ago. The depth and the breadth of this crisis requires a response unprecedented in scale, speed and solidarity.
In the past weeks, the Commission has acted to provide Member States with all the flexibility they need to support financially their health care systems, their businesses and workers. It has acted to coordinate, speed up and reinforce the procurement efforts of medical equipment and has directed research funding to the development of a vaccine. It has worked tirelessly to ensure that goods and cross-border workers can continue to move across the EU, to keep hospitals functioning, factories running and shop shelves stocked. It has and continues to support the repatriation of EU citizens, their families and long-term residents to Europe from across the world.
In doing this, the Commission is acting on its conviction that the only effective solution to the crisis in Europe is one based on cooperation, flexibility and, above all, solidarity.
Today’s proposals take the response to a new level.
Commenting on the proposals adopted today, President von der Leyen said: “In this coronavirus crisis, only the strongest of responses will do. We must use every means at our disposal. Every available euro in the EU budget will be redirected to address it, every rule will be eased to enable the funding to flow rapidly and effectively. With a new solidarity instrument, we will mobilise €100 billion to keep people in jobs and businesses running. With this, we are joining forces with Member States to save lives and protect livelihoods. This is European solidarity.”
€100 billion to keep people in jobs and businesses running: the SURE initiative
We need to cushion the economic blow in order for the EU economy to be ready to restart when the conditions are right. To achieve this, we must keep people in employment and businesses running. All Member States have or will soon have short-time work schemes to help achieve this.
SURE is the Commission’s answer to this: a new instrument that will provide up to €100 billion in loans to countries that need it to ensure that workers receive an income and businesses keep their staff. This allows people to continue to pay their rent, bills and food shopping and helps provide much needed stability to the economy.
The loans will be based on guarantees provided by Member States and will be directed to where they are most urgently needed. All Member States will be able to make use of this but it will be of particular importance to the hardest-hit.
SURE will support short-time work schemes and similar measures to help Member States protect jobs, employees and self-employed against the risk of dismissal and loss of income. Firms will be able to temporarily reduce the hours of employees or suspend work altogether, with income support provided by the State for the hours not worked. The self-employed will receive income replacement for the current emergency.
Delivering for the most deprived – the Fund for European Aid to the Most Deprived
As most of Europe practices social distancing to slow the spread of the virus, it is all the more important that those who rely on others for the most basic of needs are not cut off from help. The Fund for European Aid to the Most Deprived will evolve to meet the challenge: in particular, the use of electronic vouchers to reduce the risk of contamination will be introduced, as well as the possibility of buying protective equipment for those delivering the aid.
Supporting fishermen and farmers
Europe’s farming and fisheries have an essential role in providing us with the food we eat. They are hard hit by the crisis, in turn hitting our food supply chains and the local economies that the sector sustains.
As with the structural funds, the use of the European Maritime and Fisheries Fund will be made more flexible. Member States will be able to provide support:
to fishermen for the temporary cessation of fishing activities;
to aquaculture farmers for the temporary suspension or reduction of production and provide support;
and to producer organisations for the temporary storage of fishery and aquaculture products.
The Commission will also shortly propose a range of measures to ensure that farmers and other beneficiaries can get the support they need from the Common Agricultural Policy, for example by granting more time to introduce applications for support and more time to allow administrations to process them, increasing advances for direct payments and rural development payments, and offering additional flexibility for on-the-spot checks to minimise the need for physical contact and reduce administrative burden.
Protecting our economy and people with all available means
Redirecting all Cohesion Policy funds to fight the emergency
All uncommitted money from the three Cohesion Policy funds – the European Regional Development Fund, the European Social Fund and the Cohesion Fund – will be mobilised to address the effects of the public health crisis.
To make sure that funds can be re-directed to where they are most urgently needed, transfers between funds as well as between categories of regions and between policy objectives will be made possible. Moreover, co-financing requirements will be abandoned, as Member States are already using all their means to fight the crisis. Administration will be simplified.
The Emergency Support Instrument
The European Union has not faced a health crisis in its history on this scale or spreading at this speed. In response, the first priority is to save lives and to meet the needs of our health care systems and professionals who are working miracles every day right across our Union.
The Commission is working hard to ensure the supply of protective gear and respiratory equipment. Despite the strong production efforts of industry, Member States still face severe shortages of protective gear and respiratory equipment in some areas. They also lack sufficient treatment facilities and would benefit from being able to move patients to areas with more resources and dispatch medical staff to hardest-hit places. Support will also be needed for mass testing, for medical research, deploying new treatments, and for producing, purchasing and distributing vaccines across the EU.
The EU is today proposing to use all available remaining funds from this year’s EU budget to help to respond to the needs of European health systems.
€3 billion will be put into the Emergency Support Instrument, of which €300 million will be allocated to RescEU to support the common stockpile of equipment. The first priority would be managing the public health crisis and securing vital equipment and supplies, from ventilators to personal protective gear, from mobile medical teams to medical assistance for the most vulnerable, including those in refugee camps. The second area of focus would be on enabling the scaling up of testing efforts. The proposal would also enable the Commission to procure directly on behalf of the Member States.
More to come
As the situation continues to evolve, the Commission will come forward with more proposals and will work with the other EU institutions to move forward as quickly as possible.
Compliments of the European Commission.

April 2, 2020
Find out what the European Institutions are doing to mitigate the impact of the Covid19 outbreak, protect people and the economy and promote solidarity.

1. Slowing the spread of the virus
To help limit the transmission of the virus in Europe and beyond, the EU has closed its external borders to non-essential travel, while ensuring essential goods keep moving across the EU through the introduction of green lanes. Additional resources are foreseen for the European Centre for Disease Prevention and Control, which provides rapid risk assessments and epidemiological updates on the outbreak.
2. Providing medical equipment
EU-countries have speedy access to the first ever RescEU stockpile of medical equipment, such as ventilators and protective masks, under the Civil Protection Mechanism. In addition, the EU has set up a huge international tender allowing member states to make joint purchases of equipment and drugs.
3. Promoting research
The EU’s Horizon 2020 research programme is funding 18 research projects and 140 teams across Europe to help find a vaccine quickly against Covid-19. The aim is to improve diagnostics, preparedness, clinical management and treatment.
4. Assuring the EU’s recovery
To help the EU recover from the economic and social impact of the pandemic, the European Commission will come up with a fresh proposal for the EU’s long-term budget for 2021-2027, which will include a stimulus package. The European Parliament has the final word on the proposal.
5. Repatriating EU citizens
More than 10,000 Europeans stranded around the world by the outbreak have been returned home thanks to the EU Civil Protection mechanism.
6. Boosting European solidarity
The European Parliament has backed new rules allowing member states to request financial assistance from the EU Solidarity Fund to cover health emergencies. With the newly broadened scope of the fund, up to €800 million will be made available for member states this year to fight the coronavirus pandemic.
7. Supporting the economy
The European Central Bank is providing €750 billion to relieve government debt during the crisis, as well as €120 billion in quantitative easing and €20 billion in debt purchases. In addition, MEPs voted to make €37 billion from existing EU structural funds available to EU countries to tackle the coronavirus crisis and support healthcare, businesses and workers.
8. Protecting jobs
To ensure employees can keep their job when companies run out of work due to the coronavirus crisis, the Commission has proposed the concept of state-supported short time work (SURE).
9. Safeguarding the internet
With millions of people forced to stay at home, the EU has asked Netflix, Facebook and YouTube to reduce streaming quality to avoid overloading the web. This allows everyone to use the internet, be it for work or for leisure.
10. Protecting the environment and airlines
Parliament has supported the Commission’s proposal to temporarily stop empty “ghost flights”. By waiving the rule that obliges airlines to operate their planned take-off and landing slots to keep them the following season, the EU is ending unnecessary emissions and helping airlines adjust to lower demand.
Compliments of the European Parliament.

March 30, 2020
As a result of the coronavirus outbreak, New York State, New Jersey, and Connecticut have closed nonessential businesses and schools and asked residents to stay home in an effort to slow the spread of the virus. These actions are unprecedented, and the economic impacts are likely to be temporary but severe, and difficult to track and measure. With conditions changing so rapidly, timely data on the economic impacts of the outbreak and resultant policies on businesses and people are both scarce and important. In this post, we provide some very recent information on the economic effects of the coronavirus outbreak in the tri-state region based on responses to a special survey we fielded between March 20 and March 24. The results are striking, though perhaps not surprising: roughly half of the service firms surveyed and well over a third of manufacturers said they have already implemented at least a partial temporary shutdown, and more firms plan to do so in the near future. Further, 40 percent of service firms and 30 percent of manufacturers are reporting staff reductions, and many firms are noting difficulty accessing credit and are concerned about their solvency.
With the coronavirus outbreak affecting businesses in myriad ways, partly through state directives covering local businesses, many firms in the region have curtailed their activities, mostly temporarily. As mentioned, about half of service firms and more than a third of manufacturers have instituted a partial temporary shutdown. Fewer than 10 percent of firms indicated that they have implemented a permanent shutdown, whether partial or full, and the vast majority of businesses surveyed said they are not planning to do so. In terms of the bottom line, 85 percent of service firms and 70 percent of manufacturers indicated that their profits have already fallen since the beginning of March, in many cases substantially.
The magnitude of such disruptions has reverberated through the labor market. As the table below shows, roughly 40 percent of service firms said they have already reduced payroll staff as a result of the coronavirus outbreak, with the most widespread declines reported by leisure and hospitality, retail trade, and health services businesses. Geographically, staff reductions among service firms tended to be most widespread on Long Island, in the Lower Hudson Valley, and in upstate New York; less so in New York City, northern New Jersey, and Fairfield County, Connecticut. Around 30 percent of manufacturers reported staff reductions. In both surveys, similar proportions of firms said they have cut back the hours of existing staff and reduced the number of temporary workers.

We also asked whether and how firms have adjusted work arrangements to adapt to the coronavirus outbreak. More than 80 percent of service firms said they have implemented or expanded telecommuting. About half of those have done so for all staff, with the average service firm indicating that nearly 60 percent of staff are currently telecommuting, and this incidence is highest (75 percent) among New York City firms. However, manufacturers indicated that only about a quarter of their staff, on average, are telecommuting. Further, about half of all firms indicated they have implemented or expanded paid sick/family leave for their workers.
Many firms are concerned about access to credit and maintaining solvency, as shown in the table below. The greatest concern among both service firms and manufacturers is their ability to get adequate credit from suppliers. Maintaining solvency and incurring excessive debt were also fairly widely mentioned as concerns, particularly among firms in the finance industry.

Finally, respondents were asked how they were covering shortfalls in revenues, with results shown in the table below. Drawing down cash reserves was widely mentioned, followed by making increased use of credit lines. A number of respondents also indicated that they are dipping into personal savings, while relatively few are taking out new loans or making a claim on business interruption insurance. Of note, a sizable number of firms commented that business interruption insurance policies would not cover damages resulting from the coronavirus outbreak.

As the coronavirus pandemic unfolds, we will continue to monitor economic conditions in the region and make our results available as quickly as possible. Our next regular monthly business survey reports—Empire State Manufacturing Survey, Business Leaders Survey, and Supplemental Survey—will be released on April 15 and 16.
AUTHORS:
• Jaison R. Abel, Jason Bram, and Richard Deitz
Compliments of the Federal Reserve Bank of New York.