An estimated 1.5 to 2.5 million businesses in Europe have been able to keep on their employees during the pandemic – thanks to the European Commission’s SURE initiative, which supports government furlough schemes. In the 18 countries which have received SURE funds, it has helped 25 to 30 million workers keep their jobs during the pandemic. The EU’s SURE and NextGenerationEU recovery packages are helping countries build more resilient economies following the COVID-19 pandemic. To fund them, the European Union is issuing up to 850 billion euros (900 billion euros in current prices) in bonds over the next 5 years. Borrowing at a European level means that all EU countries’ economies benefit. It is the first time the EU is borrowing on such a large scale, making it the new big player in the sovereign bond market. This also helps underpin the international position of the euro. The EU’s high credit rating, plus ability to guarantee the debt, means investors are more confident buying EU bonds. They include social and green bonds, meaning the funds serve a truly social or green objective, and will be repaid by 2058.
There was a huge interest and there’s a huge interest because they also consider the euro and the European Union as a safe asset, as a safe haven. And this is very important in times like this. There’s also apparently a strong interest to create sort of an alternative to the dollar, not in a way to compete, but really to have alternatives. The impact will be a huge one. There will be an issue of at least more than 800 billion – in bonds denominated in euro – and that this is in the magnitude never did in the past, and this will have certainly a huge impact on the role of the euro. Also, at the capital market worldwide – will strengthen the euro as a real alternative currency. And that’s why it has also a very strong economic but also political impact.