During Friday’s Eurogroup teleconference, Finance Minister Christos Staikouras is determined to press for swift decisions and efficient procedures so that support programs are immediately implemented in the eurozone.
The council of the euro area’s finance ministers will discuss the loans of the SURE program for the support of workers and the guarantees of the European Investment Bank for working capital to enterprises – i.e. two out of the three European financial instruments aimed at mitigating the effects of the coronavirus alongside the European Stability Mechanism credit line.
The ESM support loans, for tackling the direct and indirect consequences of the pandemic, will be on the table of the same set of ministers earlier tomorrow, who will convene as the ESM board to ratify the decisions of last week’s Eurogroup.
Besides the rapid application of SURE, Athens wants its resources to be distributed not only based on each country’s share of the European Union budget but also according to the projected financial impact of the pandemic on member-states. Given that Greece – per the spring forecasts of the European Commission – is the hardest-hit country (with a 9.7% recession expected this year), it could look forward to a higher share than the €1.4 billion it would normally be entitled to. It is estimated the amount could rise above €1.5 billion.
SURE may at this point be the most interesting program for the government, as it has a ready plan for utilization: It is the support plan for workers who find themselves in reduced employment for a certain period. The state will cover part of their income loss.
As for the EIB collateral, its use will be down to the enterprises to apply for loans. Originally the plan was for guarantees for loans to small and medium-sized enterprises, which Athens had considered beneficial given that the Greek economy is based on SMEs. However, the eurozone is now considering expanding the scope of the measure to include larger enterprises, which may include some large ones.
Details on these two programs will be discussed on Friday in the hope they will apply from June.