Brussels, Apr 1 (efe-epa).- The European Commission on Wednesday said it will launch a new short-term work scheme to help people and companies in countries such as Italy and Spain that have been hardest hit by the coronavirus pandemic.
In a video statement, EC president Ursula von der Leyen called the COVID-19 outbreak the “greatest human tragedy since the wars” and said the EU was “mourning with” the bloc’s worst affected members.
“Europe is coming to their support with a new initiative,” Von der Leyen said.
She described Madrid and Milan and their surrounding areas, both hotspots for the virus, as “part of the backbone of Europe’s economy.”
“They need our support to get through the crisis,” she continued. “This is why we have developed the concept of short time work. It is intended to help all countries that have been hard hit, and it will do so thanks to the solidarity of other member states.”
The announcement follows last week’s failure by EU leaders to agree on a coordinated economic and fiscal response to tackle the effects of the crisis.
Consensus was held back by divisions arising between nine countries that are struggling most to contain the outbreak, including Spain, Italy and France, and mostly northern nations such as Germany, Austria and the Netherlands.
The main sticking point at the meeting was over a proposal to create so-called “Corona bonds,” which would entail issuing joint bonds to help stimulate the bloc’s economy from the slowdown caused by the coronavirus.
Rome and Madrid last week urged the EU to approve the release of supplementary funds and bonds, but all the bloc could achieve was convening a follow up meeting, due next week.
The Eurogroup, which gathers the EU’s finance and economy ministers, is meeting on 7 April in a bid to propose measures that will further mitigate the socio-economic damage of the crisis after last week’s failed Council summit.
Germany’s Chancellor Angela Merkel said last week that corona bonds were “not on the agenda,” with Dutch Prime Minister Mark Rutte also standing firm.
The debt and euro crisis that followed the financial collapse in 2008 still haunts some of northern Europe’s decision-makers.
But others in the Netherlands have urged the leadership to lend more support to their fellow EU members.
The Netherlands will “no longer be a rich country in the North if the South falls,” Nout Wellink, former president of the Dutch Central Bank, told public radio this week.
“It’s like a healthy man being swept up by an avalanche,” he added.
The impasse has led to accusations from Italy, Spain and others that their European partners are abandoning them in the midst of a crisis that Italian Prime Minister Giuseppe Conte has said “affects us all.”
The Commission’s proposal of a state-supported short-time work scheme known as SURE, seeks to respond to and quell some of those fears by protecting jobs and subsidising companies that are unable to turn a profit due to the slowdown.
The framework is designed to complement those already in place in countries like Germany (‘Kurzarbeit’ or ‘short work’) and Spain, whose equivalent is the ERTE.
“We have learnt the lessons from the crisis in 2008,” Von der Leyen said. “Member states who had this instrument helped millions stay in their jobs and companies to go through the crisis with their employees.
“It has mitigated the effects of the recession, kept people in work, and enabled companies to return to the markets with renewed vigor.”