Brussels, Mar 13 (EFE).- The European Commission on Friday said it would free up 37 billion euro ($41.162 billion) for health and employment sectors as well as small and medium-sized enterprises as part of its response to the coronavirus pandemic.
“The Coronavirus pandemic is testing us all. This is not only an unprecedented challenge for our healthcare systems, but also a major shock for our economies,” EC president Ursula von der Leyen told a press conference.
The Commission has pledged to use “all the instruments at its disposal” to offset the damaging consequences of the pandemic, which has so far caused over 5,100 deaths and nearly 140,000 cases worldwide. More than 70,000 people have recovered.
Italy is the worst-affected European nation, with 1,016 deaths and a total of 15,113 cases, with Spain also struggling to deal with an outbreak that has killed 120 people and infected more than 4,200.
In a statement, the EC said that the main fiscal response to the virus would come from the national budgets of member states, who are enabled under EU rules to “take swift and effective action”.
There are mechanisms in place that enable countries to compensate companies for economic losses caused by these exceptional circumstances, “including measures in sectors such as aviation and tourism.”
Von der Leyen unveiled the Coronavirus Response Investment Initiative, under which the Commission has proposed to direct 37 billion euro to fight the outbreak and its negative socio-economic consequences, for approval by the European Council.
The EC also proposed to extend the scope of the EU Solidarity Fund to include a public health crisis. “Up to 800 million euro is available”, the statement said.
The stimulus packages come one day after the European Central Bank unveiled its own “comprehensive” measures, including the purchase of 120 billion euro worth of bonds by the end of the year, as well as the introduction of a low-cost loans programme for banks to encourage them to maintain their lending policies to SMEs.
Growth in the euro area and the bloc as a whole was “very likely” to “fall below zero (…) and potentially even considerably below zero”, the Commission’s director general for economic and financial affairs said on Friday.
Maarten Verwey said that Brussels’ previous forecast – made only last month – that the EU’s economy would grow this year by 1.4 percent would need to be revised down.
What is clear after everything that is happening is we need to adjust that, and probably quite significantly,” Verwey said, adding that a new forecast would not be available until hard data was procured in May. He warned that the most recent models forecast growth “deteriorating very rapidly.”
While massive losses are expected, both Verwey and Von der Leyen said they remained hopeful and positive that the bloc would be able to overcome the unprecedented challenges the global outbreak is posing.
“I am convinced that the EU can withstand this shock, but each member state needs to live up to its full responsibility and the EU as a whole needs to be determined, coordinated and united,” the Commission president said.
“We stand ready to do more as the situation evolves. We will do whatever is necessary to support the Europeans and the European economy.” EFE