The coronavirus pandemic has created an unprecedented economic and social challenge for all European Union Member States, piling pressure on health resources and putting millions of jobs at risk due to social restrictions required to control the spread of the virus. It is no understatement to say that the Covid-19 outbreak has posed the most significant challenge to our society and economy since World War II.
Aware of the gravity of the situation, the European Union acted quickly at the onset of the pandemic by mobilising significant financial resources to support Member States.
Within a few weeks from the emergence of the first cases in Europe, the European Commission proposed the setting up of SURE, a €100 billion solidarity instrument to support businesses and employment. Through SURE, countries were provided with access to loans based on guarantees provided by Member States.
Moreover, the EU executive also proposed the redirection of all uncommitted funding from the three Cohesion Policy funds – the European Regional Development Fund, the European Social Fund and the Cohesion Fund – to address the effects of the COVID-19 crisis.
While traditionally countries are expected to provide a small percentage of financing related to any project, in view of the severity of the situation, the European Commisson allowed the possibility for a 100% EU co-financing rate for cohesion policy programmes for the accounting year 2020-2021, thus reducing the pressure on the already-stressed national budgets of Member States.
In Malta, over €60m in Cohesion Policy funds have been reallocated towards COVID-relief measures to support the Maltese health system, aid businesses and maintain jobs in industries that were adversely affected by the pandemic.
Through this funding, health authorities in Malta were able to purchase an additional 78 beds, 340 ventilators and around one million pieces of personal protective equipment (PPEs).
Cohesion funding was also redirected to provide assistance to hundreds of SMEs to cover working capital costs and safeguard more than 35,000 individual jobs through various measures, ensuring the survival of workplaces.
In this way, EU funding was essential to ensure that the economic fall out from the necessary restrictions would not result in additional social consequences. The quick mobilisation of this cohesion funding mitigated the negative socio-economic impact of the pandemic through the guarantee of a basic income for our local businesses, in most cases enabling them to keep their full workforce.