Like many jurisdictions around the world, the European Union has announced extraordinary measures to combat the Coronavirus, or COVID-19, including measures to mitigate the impact the illness will have on SMEs.
In a statement yesterday, the Commission said it considers the COVID-19 pandemic as qualifying as an “unusual event outside the control of government”. The Commission will recommend adjusting the fiscal efforts required from Member States in case of negative growth or large drops in [economic] activity.
More policy action may be in the queue, including “general fiscal policy support” and suspending the fiscal adjustment recommended by the Council in case of a severe economic downturn in the Euro area or the EU as a whole.
Regarding the impact to European SMEs, the EU had this to say:
“To bring immediate relief to hard-hit SMEs, the EU budget will deploy its existing instruments to support these companies with liquidity, complementing measures taken at national level. In the coming weeks, € 1 billion will be redirected from the EU budget as a guarantee to the European Investment Fund to incentivise banks to provide liquidity to SMEs and midcaps. This will help at least 100,000 European SMEs and small mid-caps with about € 8 billion of financing. We will also provide credit holidays to the existing debtors that are negatively affected.”
The complete statement on the Coronavirus is available here.