State gets further €523 million loan from EC to safeguard jobs affected by pandemic

  • Lusa
  • 29 March 2022

The EU has disbursed €523 million to Portugal in loans to support reduced-time work and other programmes to safeguard jobs due to Covid-19.

The European Commission on Tuesday announced it has disbursed €523 million to Portugal in loans to support reduced-time work and other programmes to safeguard jobs due to Covid-19, with €5.9 billion already distributed to the country.

At issue is SURE, the European Union (EU) programme set up during the pandemic to fund reduced-time work schemes and safeguard jobs, under which “the European Commission today disbursed €2.17 billion to three EU member states in the eighth instalment of financial support”, of which €523 million was mobilised for Portugal.

In a press release, European Commissioner for the Economy Paolo Gentiloni highlights that “with these additional disbursements, SURE continues to support workers and businesses in Hungary, Poland and Portugal”, and is also a “striking example of the difference that common EU action can make for citizens in times of crisis”.

These SURE loans help member states cope with sudden increases in public spending to preserve jobs in the wake of the pandemic, supporting expenditure directly related to the funding of national reduced-time work schemes and other similar measures that countries have implemented as a response to Covid-19, including for the self-employed.

According to figures from Brussels, Portugal has already collected €5.9 billion under SURE, the total ‘cake’ originally planned.

Today’s disbursements follow a $2.17 billion (around €2 billion) 15-year bond issue by the European Commission last week under SURE.

In the EU as a whole, the European Commission has already provided a total of €91.8 billion in ‘back-to-back’ loans under the programme to interested countries.

‘Back-to-back’ funding allows the European Commission to issue bonds and transfer the proceeds directly to the beneficiary country under the same conditions as it received them (in terms of interest rate and maturity).

“All EU member states that asked to benefit from the scheme received part or all of the amount requested,” concludes the European Commission.

There were 19 EU member states that requested money under SURE, equivalent to €94.4 billion in financial support, with other countries able to submit requests to access €5.6 billion in financial assistance.

The SURE instrument, set up in 2020 to protect jobs, has been one part of the EU’s response to the Covid-19 crisis.

To fund SURE, the Commission is issuing up to €100 billion of social bonds.

This has already made the EU executive – on behalf of the EU – the largest issuer of social bonds in the world.