As the second wave of the pandemic continues, jobs and businesses across Europe are being hit hard. However, many have been cushioned from the worst of the economic fallout by government job retention schemes to keep people in work. Although unemployment is set to rise to 9.4% in 2021 in the eurozone area, an increase of 1.9% from the 2019 pre-pandemic level of 7.5% , it has stayed relatively low when compared to the drop in economic activity.
The European Commission is borrowing up to 100 billion euros on capital markets by issuing bonds with low-interest rates that benefit from the EU’s solid credit rating. It then lends the proceeds to Member States under the same conditions the money was received. All bonds issued in 2020 are due for repayment anywhere between 2025 and 2051.
The SURE bonds (Support to mitigate Unemployment Risks in an Emergency). are ‘social bonds’, meaning the funds serve a truly social objective. Already almost 40 billion euros has been raised on the markets by the social bonds since October last year.
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