Brussels (Reuters) The European Commission will propose, on Thursday, a package of measures to help the EU economy, hit by the coronavirus pandemic.
The measures include a short-time work scheme, easier access to funds for farmers and fishermen as well as financing for development projects.
The Commission expects the EU to go into a deep recession this year as the coronavirus outbreak has slowed economic activity to a crawl across the 27 member-states.
“The depth and the breadth of this crisis requires a response unprecedented in scale, speed and solidarity,’’ the EU executive said in a document to be published later on Thursday and seen by Reuters in advance of the official release.
To prevent firms from laying off workers, when there is not enough work, the Commission proposed that all EU countries adopt the German “Kurzarbeit” scheme under which employers cut working hours, not jobs, and the government would pay for the difference in salaries so that workers retain their spending power.
To finance that, the Commission would borrow 100 billion euros on the markets against EU governments’ guarantees, using its triple-A rating and then lend the money on cheaply to the member states, many of which have lower credit ratings.
The document said the Commission would also propose to increase cash advances to farmers under the EU’s Common Agriculture Policy and give them more time to apply for support as well as more time for the claims to be processed.
The EU executive will propose exceptional flexibility in the use of its maritime and fisheries fund to provide support to fishermen for a temporary cessation of fishing.
The document said the Commission would also propose to remove any national co-financing normally needed when countries get EU money to build infrastructure projects such as motorways, sewage plants and bridges, making the projects fully paid for by the bloc.
Money can also be moved between regions, it said.
“This is an unprecedented move, which reflects the need for member states to use all available means to support their citizens at this moment,’’ the document said of the decision to waive the co-financing rule.
The proposals must still be approved by the 27 member states, which are feuding over how far to go in supporting their economies.
Southern nations such as Italy, particularly hard-hit by the coronavirus emergency, have called for far-reaching measures such as issuing joint debt but the fiscally conservative north has urged more restraint in rolling out targeted aid schemes.