The EU mobilizes 7.5 billion for a Fund that helps SMEs to mitigate the effects of the coronavirus

The European Commission will immediately mobilize up to 7.5 billion euros of the Structural Funds to create a mechanism that alleviates the economic effects of the coronavirus in SMEs, avoids liquidity problems and helps the health sector. The president, Ursula von der Leyen, has announced this after concluding the meeting of the Heads of State and Government of the 27 by teleconference convened for this afternoon.

The aspiration, the German said, is that “that Fund will soon reach 25,000 million,” but without specifying where the additional resources will come from or if the total amount would be achieved through multipliers, using public money to attract private investment. The idea is that part of these resources, for example, be used to co-finance measures against the virus, in the usual way in the EU. “It is time for action,” said the German, “We must act at the macroeconomic level and we will use all the tools at our disposal to ensure that the European economy is weathering the storm,” he added in up to three languages. That is, squeezing to the maximum the margins of flexibility contemplated in the Stability and Growth Pact and in the European state aid standards.

There was no great hope for this atypical European Council, the first one that is done at a distance, but there are quite some expectations. The result, therefore, is not a surprise or a huge disappointment, but it does seem to fall short. Much more of the package that Emmanuel Macron had outlined on the eve.

Leaders have decided that the measures must be essentially national, but that coordination is essential. And therefore, the Commission and the Eurogroup, which meets in Brussels next Monday, will study and propose additional measures. But no trace of more creative and daring options that some experts had put on the table, such as reducing Social Security contributions for a time at 27 at a time, postponing them or agreeing on coverage by employment systems to the companies that see their production reduced or stopped.

“The Union and its Member States are ready to make use of all the necessary instruments. In particular, we will address any impact on liquidity, in supporting the SMEs and specific sectors affected, and their employees. A flexible application will be needed. of EU rules, in particular as regards state aid and the Stability and Growth Pact, “explained the president of the European Council, Charles Michel, after the first videoconference summit in history.

Leaders have identified four priorities. First, stop the contagion as much as possible. Second, ensure that there is sufficient stock of the essential medical material. For this, the Commission itself will make purchases through the Civil Protection Framework. Focusing on masks and respirators.

It is striking that the vagueness comes hours after China has promised very concrete material help, with up to two million masks, to Rome. In addition to fans or respirators, in addition to costumes for health workers.

Third, up to 140 million euros for research and development in 17 projects already identified. And finally, the economic consequences already mentioned. To prevent liquidity problems from becoming a solvency crisis as happened a decade ago.

The president of the ECB, Christine Lagarde, has once again called for fiscal policies. On Thursday, from Frankfurt, she will have to pronounce herself and the markets look very carefully if she follows in the footsteps of the Federal Reserve, which lowered the 50 basis points last week.

It is hard to believe that the Heads of State and Government have waited until March 10, already with Italy closed to lime and song, for their first discussion at the highest level. If coordination had been an example for posterity, or if its ministers (of Economy, Health, Interior, Justice and several others) had covered all the land, it would not have been necessary. But the reality is the opposite. The Eurogroup, also telephone, last week was limited to conjure and little else. At the material level, the requests for help from Rome fell into a broken sack. And there are no clear slogans either from the institutions about protocols, borders, etc.

The performance of the same community entities is different. The European Parliament has held a historic plenary session today. He moved from Strasbourg to Brussels to prevent the displacement of thousands of people. It has been reduced to a day of debates and no votes. And its president, David Sassoli, has decided to confine himself in quarantine at home for two weeks to set an example for his Italian citizens. The Council itself has minimized meetings and canceled meetings of ministers. But the press conferences