The European Commission is due to present, in the coming days, a temporary instrument whose objective would be to help Member States to support employment through part-time activity mechanisms, in order to smooth out the negative socio-economic effects induced by the COVID-19 epidemic, according to several sources consulted on Monday 23 March.
This instrument would be based on Article 122.2 of the TFEU, which provides for a solidarity mechanism between Member States if one of them encounters "serious difficulties", such as Italy, which is hard hit by the epidemic. This mechanism would draw its inspiration from an instrument that was set up some ten years ago, namely the European Financial Stabilisation Mechanism (EFSM). But nothing has been decided and discussions are still ongoing.
As a reminder, this was a facility that allowed the European Commission to raise up to €60 billion on behalf of the EU to finance loans to EU Member States experiencing serious economic and financial turmoil. This instrument was guaranteed through the EU budget.
This proposal still needs to be discussed by the Member States, probably tomorrow, during the Eurogroup, and during the European Council by videoconference on Thursday 26 March, in particular to discuss the financing arrangements. The proposal is expected be ready and could be rapidly deployed, perhaps as early as next week, we are told. All that remains to be decided is how it will be financed.
What about the permanent European scheme? This proposal should not replace the European unemployment reinsurance scheme, which, according to several sources, is of a structural and permanent nature, but here again, there is room for doubt. Even if the proposal is maintained, it is not certain that it will be presented in the fourth quarter of 2020, as originally foreseen in the European Commission's work programme (see EUROPE 12412/16), as the epidemic has upset the entire timetable of the institution. (Original version in French by Pascal Hansens)