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Coronavirus pandemic

EU leaders approve €540 bln emergency assistance program

This program is a short-term assistance mechanism designed to provide an initial impetus for restarting the EU economy

BRUSSELS, April 24. /TASS/. The leaders of 27 EU member states approved an emergency program to help the European economy in the amount of €540 bln, President of the European Council Charles Michel announced at a press conference following the results of the online summit.

According to him, the countries approved a program for €540 bln, which will be launched on June 1.

This program includes three main packages. First, the European Commission has already created a €100 bln SURE program to pay targeted compensation to employers so that at least some of them don’t fire their employees. Second, the European Investment Bank, for its part, announced a soft loan program of €200 bln to support small and medium enterprises. Third, another €240 bln should be raised in the form of borrowed funds by the eurozone countries through the European stabilization mechanism: this money can be used as structural assistance to the most severely affected states (Italy and Spain) to keep them from default.

This program is a short-term assistance mechanism designed to provide an initial impetus for restarting the EU economy. For a full recovery, the EU summit said it needs to create an additional long-term tool to support the economy. According to sources, its volume will be from €1.6 trillion to €2 trillion, valid for at least 7 years, the money in this fund will be partially attracted and redistributed through the EU budget, for which states will have to increase their contributions to the general community budget.

President of the European Central Bank Christine Lagarde stated at the summit, that the pessimistic scenario estimates the economic downturn in the EU at 15% in 2020, which is an unprecedented annual figure for the entire history of the community.

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