MNI EXCLUSIVE: EU Commission Says Gets 17 SURE Aid Requests

The European Commission has told MNI it has received 17 'formal' applications for help from member states for assistance under its SURE part-time Covid employment scheme, although other European Union sources suggest the number could be higher.

This high level of interest means that the Commission could be borrowing something close to the EUR100 billion maximum envelope for the programme over the course of this year and 2021.

"I think applications are now 19-20, for an amount close to EUR100 billion," another well-placed EU official told MNI.

The Commission said it had "been in contact with all member states on SURE."

The SURE (Support to mitigate Unemployment Risks in an Emergency) scheme was one of three Covid economic rescue measures announced by the EU in the spring of this year. The others included up to EUR100 billion of lending by the European Investment Bank to help small businesses hit by the crisis and EUR240 billion from the European Stability Mechanism in the form of pandemic credit lines, a facility which to date has drawn zero interest from member states, despite the near-unconditional and ultra-cheap borrowing terms on offer.

"Yes, it has been quite popular," conceded another EU official, referring to SURE.

The Commission is expected to make further updates later this week on the applications and it is possible it could give more details on the volume of borrowing it will need to undertake to fund the programme.

GERMANY, NETHERLANDS MAY FOREGO COVID LOANS

A Commission spokesperson said disbursements under SURE would be available once member states had signed off on the EUR25 billion of guarantees which underpin the scheme. It was currently in "the process of analysing the requests and would shortly put forward … proposals for the granting of financial support."

In a separate development, several EU officials have told MNI that they are increasingly of the view that Germany and The Netherlands will agree to forego their share of the EUR360 billion in loans available under the EU's Covid recovery programme - or 'Next Generation EU', in a move which would better free funds for southern EU member states, such as Italy and Spain, which have been worst hit by the crisis, as well as for Eastern Europe.

"For Germany that makes sense, because they borrow even cheaper than the EU. It's totally rational. I think Netherlands would think the same way," one EU official said.

Another added: "Yes, that makes a lot of sense, that is foreseen as a likely outcome."

German 10-year bunds currently yield about -0.47%, about 200 basis points less than the equivalent Italian debt.