Italy, the first EU country to impose a lockdown as hospitals buckled under a wave of hospitalisations, is set to receive €27.4 billion, followed by Spain and Poland, cleared for a loan of €21.3 billion and €11.2 billion, respectively.
The quantities proposed by the Commission must still be given the green light by the EU Council, composed of EU heads of state and led by former Belgian Premier Charles Michel.
Subject to approval, EU member countries will receive the funds in the form of loans granted “under favourable terms,” the Commission said in an online statement on Monday.
The SURE loans are part of so far three major aid schemes and safety nets unblocked by the EU to support countries’ budgets, as they rush to bail out businesses and dish out support schemes to shield workers from the economic blow of the pandemic.
In July, a coronavirus recovery plan worth €750 billion was approved after four days of marathon negotiations, in a deal hailed as “historic” by EU leaders, and which comprises €390 billion in grants, with the remaining funds granted in the form of loans.
How will SURE loans work?
While the interest rates for the SURE loans are yet to be defined, the Commission said in a statement that the funds would be lent to member states on “favourable conditions,” and national governments should also benefit from the EU executive’s favourable ratings on financial markets.
The SURE scheme should also be backed by financial guarantees provided on a voluntary basis by all member states, which must cover at least 25% of the €100 billion defined as the maximum amount to be lent out under the financial relief program.
A Commission spokesperson on Monday told The Brussels Times that a vast majority of member states had already signed bilateral guarantee agreements but declined to identify countries which had yet to do so.
After the Commission on Monday issued its per-country loan propositions, payments to member states will start as soon as the Council gave them the go-ahead and once all member countries had moved to provide the needed financial guarantees.
The official said that all member states had acted quickly and said that the Commission expected to finalise the process “very shortly.”
Gabriela Galindo & M. Apelblat The Brussels Times
UPDATE: This article has been updated to include statements from an EU Commission official on the specifics of SURE.