Croatia to Receive €1.02bn from EU SURE Instrument
ZAGREB, October 22, 2020 - By the end of this year Croatia will receive €490 million from the EU SURE instrument for temporary support to mitigate unemployment risks in an emergency following the outbreak of the coronavirus pandemic, the government said on Thursday, adding that a total of €1.02 billion has been approved for Croatia.
At today's cabinet meeting, Finance Minister Zdravko Maric was authorised to sign a loan agreement with the EU for this temporary support.
The SURE instrument was established by decision of the Council of the EU in May with the aim of providing financial assistance of up to €100 billion in the form of loans from the EU to affected member states to address sudden increases in public expenditure for the preservation of employment.
To finance these loans, the European Commission will borrow money on financial markets and lend it to member states under favourable terms. The first tranche of €17 billion was conducted a few days ago, and the interest was ten times higher, Maric said.
"The instrument is designed for short work time schemes and similar measures to help member states protect jobs and employed and self-employed people from the risk of unemployment and loss of income. All member states have signed a guarantee agreement to date, whereby the SURE instrument has become operational," Maric said.
He said that Croatia had applied for this funding to address sudden and serious increases in expenditures connected with subsidies to preserve jobs and support for shorter work time.
"A loan of €1.02 billion is available to Croatia, with a maximum average maturity of 15 years and an availability period for financial support of 18 months. Financial support can be used through a maximum of eight instalments which can be paid by one or more tranches. These are very favourable loans, and a total of €490 million will be paid to Croatia by the end of this year, which will be included in the budget revision and which is about 48% of the allocation," Maric said.
The government also decided to include micro and small businesses in the state aid programme for the sea, transport and transport infrastructure sector to help them cope with the crisis caused by the coronavirus pandemic.
Coronavirus Aid: Croatia Has Billion Euros Available From SURE
The EU's SURE loans are designed to help member states cover sudden spikes in public spending to preserve jobs, such as national part-time financing programmes and support for the self-employed amid the coronavirus pandemic.
As Poslovni Dnevnik/Ana Blaskovic writes on the 25th of August, 2020, four months after the idea was initially put on paper, the European Commission (EC) submitted a proposal to allocate 81.4 billion euros from the SURE instrument to fifteen member states to the council.
According to the proposal, Croatia would receive one billion euros in so-called soft loans to mitigate the devastating effects of the coronavirus pandemic.
Once the proposal is approved by the council, these loans will help member states to cover sudden spikes in public spending on job preservation, such as national part-time funding programmes and support for the self-employed.
After consulting with the EU member states which requested support and assessing their requests, a maximum of 27.4 billion euros was proposed to help Italy, followed by Spain with 21.3 billion euros, Poland with 11.2 billion euros and Belgium with 7.2 billion euros. 8 billion euros.
4 billion euros were on offer for Romania, 2.7 billion to Greece, 2 billion to the Czech Republic, 1.1 billion to Slovenia, and one hundred million euros less was being offered to Croatia. Portugal and Hungary have already submitted their own respective official applications to Brussels and they are currently in the process of being evaluated. Countries that have not yet submitted theirs are free to submit an official request.
Back in April, the European Commission proposed the SURE instrument, worth 100 billion euros, as part of a response to the ongoing coronavirus pandemic. Loans from this instrument will be based on a system of voluntary guarantees from member states in accordance with the EU's share of gross national income.
“We have to do everything to protect jobs and allow people to earn a living. SURE is a clear symbol of solidarity in an unprecedented crisis,'' said EC President Ursula von der Leyen.
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