Employment & Social Inclusion Entrepreneurship Sustainable Growth
On the 30th of March, the Coronavirus Response Investment Initiative has been adopted to ease Member States’ economic effort in the fight against COVID-19 outbreak. Cohesion funds can help SMEs, including industrial and service cooperatives.
European citizens are facing an unprecedented situation characterised by loss and suffering due to the outbreak of the new Coronavirus pandemic. While Italy and Spain seem to be the most affected countries in the EU and are facing the dire consequences of healthcare systems saturation and higher number of deaths, all Member States face severe public health distress and threats.
Most Governments have taken steps to limit the citizens’ ability to circulate and work, through social distancing strategies going from recommendations to mandatory self-isolation since the virus is still largely unknown to medical experts and a vaccine remains to be developed.
The economic consequences of this fight to protect public health are critical. For this reason, the European Union adopted two regulations that will allow Member States to quickly release funding from the EU budget for tackling the COVID-19 crisis. One of the acts amends the rules of the structural and investment funds, while the other widens the scope of the EU Solidarity Fund.
The Coronavirus Response Investment Initiative (CRII) will allow Member States to use EUR 37 billion of cohesion money to strengthen healthcare systems, as well as support small and medium-sized enterprises, short-term working schemes, and community-based services.
Funds from CRII can be used by Member States to support working capital of SMEs.
About €8 billion of the total amount will come from unspent 2019 cohesion money. “The new measure allows member states to spend unused money to mitigate the impact of the pandemic instead of returning it to the EU budget. Another €29 billion will be disbursed early from allocations which would have been due later this year”, the Council affirms.
All expenditure will be retroactive as of 1 February 2020 to cover costs already incurred.
The Council also amended the scope of the EU Solidarity Fund to include public health emergencies in addition to natural disasters.