Ireland awarded EU loans to cover wage scheme

It’s the first time the Government has used the European Commission’s fund for “support to mitigate unemployment risks in an emergency” (or SURE).

The aid was part of a larger €13bn disbursement on Tuesday, with the balance going to Spain (€4.06bn), Belgium (€2.2bn), Italy (€1.87bn), Poland (€1.4bn) and Czechia (€1bn).

Commission president Ursula von der Leyen said the money “helps protect jobs and enables economies to recover faster from the crisis”.

The SURE fund covers “sudden increases in public expenditure to preserve employment” such as short-time working schemes.

“This is a welcome development, which supports jobs and workers and demonstrates the benefits of acting together in a time of crisis,” said Finance Mi nister Paschal Donohoe . “The focus now is ensuring we get a strong recovery under way.”

The G overnment applied for the loan last October to cover the Temporary Wage Subsidy Scheme (TWSS) – the precursor to the Employment Wage Subsidy Scheme (EWSS) – which ran from March and August 2020.

The total cost is estimated at over €2.7bn.

“As the effects of the pandemic continue to weigh on our economies, today the Commission is disbursing further significant financial support to six countries, including Ireland for the first time,” said Commission economy chief Paolo Gentiloni.

“This is a crucial contribution to national efforts to support workers through these difficult times. I’m proud of the European success story that is SURE.”

The money was raised on financial markets last week, with the European Commission issuing one five-year bond, which attracted a negative yield of -0.488pc, and a 25-year bond priced at +0.476pc.

The money will have to be paid back to the EU, but Ireland will benefit from the Commission’s favourable borrowing conditions.

The Commission kicked off its SURE funding programme last October, with two long-term ‘ social bonds amounting to €17bn.

It was the highest amount of debt ever issued in euro by a sovereign.