HomeWorldBrussels wants European loan mechanism to support EU families

Brussels wants European loan mechanism to support EU families

The European Commissioner for Economy, Paolo Gentiloni, on Tuesday defended the creation of a temporary European mechanism, based on favorable terms and conditions, for countries of the European Union (EU) to support households and businesses as a result of the energy crisis.

“If we want to avoid fragmentation, if we want to face this crisis, I think we need a higher level of solidarity and we need to introduce some more common tools and for example what we did with the SURE mechanism during the pandemic was an interesting proposal,” said Paolo Gentiloni.

Speaking to journalists on arrival at the meeting of EU Economy and Finance (Ecofin) ministers, in Luxembourg, the European official recalled that the SURE programme, which was used to deal with the Covid-19 crisis, “loan-based”, granted on favorable terms to EU countries requesting this aid.

This new financial instrument, announced in April 2020 as a result of the pandemic, determined a total of EUR 100 billion for the 27 Member States to support companies and the self-employed in maintaining jobs and income, functioning as temporary unemployment (by reducing hours) to secure jobs.

“I think [um mecanismo temporário deste género para enfrentar a crise energética] could be realistic,” emphasized Paolo Gentiloni today.

“Of course we are not going to talk about this today, but I want to make it very clear that our aim is to increase solidarity, avoid the risk of fragmentation and not criticize this or that Member State,” said the European Commissioner for the economy.

The position comes after, at Monday’s Eurogroup meeting, the impact on the EU as a whole of Germany’s new “bazooka”, a €200 billion package of aid to German families and businesses to cope with high energy prices, particularly gas, due to the current crisis, accentuated by the Russian invasion of Ukraine.

“We don’t blame the countries, we don’t talk about isolated countries and member states inevitably supporting their economies, but of course we ask that the measures be temporary and targeted,” Paolo said. Ecofin meeting.

The official concluded that “it’s not about criticizing a member state, but finding the opportunity to take a few more steps”, so this new tool, similar to SURE, could be a solution, he said.

On Monday, the Eurogroup rejected “broader support” for single currency economies in 2023 amid the sharp energy crisis and high inflation, suggesting targeted measures and less energy consumption to stabilize prices instead.

Last Thursday, German Chancellor Olaf Scholz announced the reactivation of the economic stabilization fund used during the Covid-19 pandemic and financial crisis to now limit the price consumers pay for the gas used to build homes. heating, generating electricity and supply factories.

Today, the European Commission is preparing a proposal to make progress in the EU with gas price caps, but according to European sources, this measure is being opposed by Germany, which in turn is making progress with major budgetary measures for its economy.

Geopolitical tensions over the war in Ukraine have impacted Europe’s energy market, not least because the EU relies on Russian fossil fuels, such as gas, and fears austerity measures this fall and winter.

Author: Lusa/DN

Source: DN

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