ACT No. XXXIV of 2020 AN ACT to authorise, regularise and to issue guarantees to the European Commission in specific cases and to provide for matters ancillary and incidental thereto.

I assent.

(L.S.)

GEORGE VELLA

President

14th July, 2020

ACT No. XXXIV of 2020

AN ACT to authorise, regularise and to issue guarantees to the

European Commission in specific cases and to provide for matters

ancillary and incidental thereto.

BE IT ENACTED by the President, by and with the advice and

consent of the House of Representatives, in this present Parliament

assembled, and by the authority of the same, as follows:-

The short title of this Act is the Guarantees to the European Short title.

Commission Act, 2020.

COUNCIL REGULATION (EU) 2020/672 of 19 May 2020

on the establishment of a European instrument for temporary support

to mitigate unemployment risks in an emergency (SURE) following

the COVID-19 outbreak

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European

Union, and in particular

Article 122 thereof, Having regard to the proposal from the

European Commission, Whereas

(1) Article 122(1) of the Treaty on the Functioning of the

European Union (TFEU) allows the Council to decide, on a proposal

from the Commission and in a spirit of solidarity between Member

States, upon the measures appropriate to respond to the

socio‐economic situation following the COVID-19 outbreak.

(2) Article 122(2) TFEU enables the Council to grant Union

financial assistance to a Member State that is in difficulties or is

seriously threatened with severe difficulties caused by exceptional

occurrences beyond its control.

(3) The severe acute respiratory syndrome coronavirus-2 (SARS-

CoV-2), which causes the coronavirus disease named COVID-19 by

the World Health Organization (WHO), is a new strain of coronavirus

not previously identified in humans. The global outbreak of that

disease is evolving rapidly and has been declared a pandemic by the

WHO. From the beginning of the COVID-19 outbreak in the Union up

until 30 March 2020, 334 396 cases and 22 209 deaths were reported

in the Member States.

(4) Member States have implemented extraordinary measures to

contain the COVID‐19 outbreak and its impact. The probability of

further transmission of COVID‐19 in the Union is considered high. In

addition to public health impacts with substantial fatal outcomes, the

COVID‐19 outbreak has had a massive and disruptive impact on the

economic systems of the Member States, caused societal disruptions

and increased public expenditure in a growing number of Member

States.

(5) That exceptional situation, which is beyond the control of the

Member States and which has immobilised a substantial part of their

labour force, has led to a sudden and severe increase in public

expenditure by the Member States on short-time work schemes for

employees and similar measures, in particular for the self-employed,

as well as expenditure on some health-related measures, in particular

in the workplace. In order to maintain the strong focus of the

i n s t r u m e n t p r o v i d e d f o r i n th i s R e g u l a t i o n a n d t h e r e b y i t s

effectiveness, health-related measures for the purpose of that

instrument may consist of those aiming at reducing occupational

hazards and ensuring the protection of workers and the self‐employed

in the workplace, and, where appropriate, some other health‐related

measures. It is necessary to facilitate efforts by the Member States to

address the sudden and severe increase in public expenditure until the

COVID-19 outbreak and its impact on their labour force are under

control.

(6) The creation of a European instrument for temporary support

to mitigate unemployment risks in an emergency (SURE) (the

‘Instrument’) following the COVID-19 outbreak should enable the

Union to respond to the crisis in the labour market in a coordinated,

rapid and effective manner and in a spirit of solidarity among Member

States, thereby alleviating the impact on employment for individuals

and the most affected economic sectors and mitigating the direct

effects of this exceptional situation on public expenditure by the

Member States.

(7) Article 220(1) of Regulation (EU, Euratom) 2018/1046 of the

European Parliament and of the Council * states that financial

assistance by the Union to Member States can take the form of a loan.

Such loans should be granted to Member States where the COVID-19

outbreak has led to a sudden and severe increase, as from 1 February

2020, in actual and possibly also planned public expenditure due to

national measures. That date ensures equal treatment for all Member

States and allows for coverage of their actual and possibly also

planned increases in spending relating to the effects on the labour

markets of the Member States, irrespective of when the COVID-19

outbreak occurred in each specific Member State. The national

measures, which are understood to be in line with the relevant

fundamental rights principles, should be directly related to the creation

or extension of short-time work schemes and to similar measures,

including measures for self-employed persons, or to some health-

* Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the

Council of 18 July 2018 on the financial rules applicable to the general budget

of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013,

(EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/

2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU

and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p.

1).

related measures. Short- time work schemes are public programmes

that in certain circumstances allow businesses experiencing economic

difficulties to temporarily reduce the hours worked by their

employees, who are provided with public income support for the hours

not worked.

Similar schemes exist for income replacement for the self-

employed. The Member State requesting financial assistance should

provide evidence of a sudden and severe increase in actual and

possibly also planned public expenditure for short-time work schemes

or similar measures. If financial assistance is granted for health-related

measures, the Member State requesting financial assistance should

also provide evidence of actual or planned expenditure related to the

relevant health-related measures.

(8) In order to provide the affected Member States with sufficient

financial means under favourable terms to enable them to deal with the

impact of the COVID-19 outbreak on their labour market, the Union’s

borrowing and lending operations under the Instrument should be

sufficiently large. The financial assistance granted by the Union in the

form of loans should therefore be financed by recourse to international

capital markets.

(9) The COVID-19 outbreak has had a massive and disruptive

impact on the economic system of each Member State. It therefore

calls for collective contributions by Member States in the form of

guarantees supporting the loans from the Union budget. Such

guarantees are necessary to enable the Union to grant loans of a

sufficient order of magnitude to Member States in order to support

labour market policies which are under the greatest strain. To ensure

that the contingent liability arising from such loans is compatible with

the applicable multiannual financial framework (‘MFF’) and

own‐resources ceilings, the guarantees provided by the Member States

should be irrevocable, unconditional and on demand, while additional

safeguards should enhance the robustness of the system. In line with

the complementary role of such guarantees, and without prejudice to

their irrevocable, unconditional and on- demand nature, the

Commission is expected, before calling on the guarantees provided by

M e m b e r St a t e s , t o d r a w o n t h e m a rg i n a v a i l a b l e u n d e r t h e

own‐resources ceiling for payment appropriations to the extent that it

is deemed sustainable by the Commission, having regard, inter alia, to

the total contingent liabilities of the Union, including under the

balance of payments facility established by Council Regulation (EC)

No 332/2002 * . In the relevant call on guarantees, the Commission

should inform the Member States about the extent to which the

available margin has been drawn. The need for guarantees provided by

Member States may be reviewed if an agreement on a revised own-

resources ceiling is reached.

(10) The additional safeguards to enhance the robustness of the

system should consist of conservative financial management, a

maximum annual exposure and sufficient diversification of the loan

portfolio.

(11) The loans granted under the Instrument should constitute

financial assistance within the meaning of Article 220 of Regulation

(EU, Euratom) 2018/1046. In accordance with point (g) of Article

282(3) of that Regulation, Article 220 of that Regulation will apply to

the loans granted under the Instrument only as from the date of

application of the post‐2020 MFF. However, it is appropriate that the

requirements set out in Article 220(5) of Regulation (EU, Euratom)

2018/1046 apply to the borrowing and lending operations under the

Instrument as of the entry into force of this Regulation.

(12) In order to make the contingent liability arising from loans

granted under the Instrument compatible with the applicable MFF and

own-resources ceilings, it is necessary to lay down prudential rules,

including on the possibility of rolling over the borrowings contracted

on behalf of the Union.

(13) Given their particular financial implications, decisions to

grant financial assistance pursuant to this Regulation require the

exercise of implementing powers, which should be conferred on the

Council. When deciding upon the amount of a loan, the Council, on a

proposal from the Commission, should consider the existing and

expected needs of the requesting Member State, as well as requests for

financial assistance pursuant to this Regulation already submitted or

planned to be submitted by other Member States, having regard to the

principles of equal treatment, solidarity, proportionality and

transparency, and in a manner that fully respects the competence of the

Member States.

(14) Article 143(1) of the Agreement on the withdrawal of the

United Kingdom of Great Britain and Northern Ireland from the

European Union and the European Atomic Energy Community (the

‘Withdrawal Agreement’) limits the liability of the United Kingdom

for its share of the contingent financial liabilities of the Union to those

contingent financial * liabilities of the Union arising from financial

operations taken by the Union before the date of entry into force of the

* Council Regulation (EC) No 332/2002 of 18 February 2002 establishing a facil-

ity providing medium-term financial assistance for Member States’ balances of

payments (OJ L 53, 23.2.2002, p. 1).

* OJ L 29, 31.1.2020, p. 7.

Withdrawal Agreement. Any contingent financial liability of the

Union arising from financial assistance under this Regulation would be

subsequent to the date of entry into force of the Withdrawal

Agreement. Therefore, the United Kingdom should not participate in

the financial assistance under this Regulation.

(15) As the Instrument is of a temporary nature in order to address

the COVID‐19 outbreak, the Commission should assess every six

months whether the exceptional circumstances causing the severe

economic disturbances in Member States still exist and report to the

Council. Consistently with the legal basis for the adoption of this

Regulation, no financial assistance should be made available under

this Regulation once the COVID‐19 emergency has passed. To that

end, it is appropriate to limit the availability of the Instrument in time.

The Council should be empowered, on a proposal from the

Commission, to extend the period of availability of the Instrument

where the exceptional occurrences that justify the application of this

Regulation continue to exist.

(16) The European Central Bank delivered its opinion on 8 May

2020. (17) Given the impact of the COVID-19 outbreak and the need for

an urgent response to the consequences of that outbreak, this

Regulation should enter into force on the date of its publication in the

Official Journal of the European Union,

HAS ADOPTED THIS REGULATION

Article 1

Subject matter and scope

1. In order to address the impact of the COVID-19 outbreak and

respond to its socio‐economic consequences, this Regulation

establishes the European instrument for temporary support to mitigate

unemployment risks in an emergency (SURE) (the ‘Instrument’).

2. This Regulation lays down the conditions and procedures

enabling the Union to provide financial assistance to a Member State

which is experiencing, or is seriously threatened with, a severe

economic disturbance caused by the COVID-19 outbreak for the

financing, primarily, of short-time work schemes or similar measures

aimed at protecting employees and the self‐employed and thus

reducing the incidence of unemployment and loss of income, as well

as for the financing, as an ancillary, of some health-related measures,

in particular in the workplace.

Article 2

Complementary nature of the Instrument

The Instrument shall complement the national measures taken by

affected Member States by providing financial assistance to help those

Member States cope with the sudden and severe increase in actual and

possibly also planned public expenditure intended to mitigate the

direct economic, social and health-related effects of the exceptional

occurrence caused by the COVID‐19 outbreak.

Article 3

Conditions for using the Instrument

1. A Member State may request Union financial assistance under

the Instrument (‘financial assistance’) where its actual and possibly

also planned public expenditure has suddenly and severely increased

as of 1 February 2020 due to national measures directly related to

short‐time work schemes and similar measures to address the socio-

economic effects of the exceptional occurrence caused by the COVID-

19 outbreak.

2. Beneficiary Member States shall use financial assistance

primarily in support of their national short-time work schemes or

similar measures, and, where applicable, in support of relevant health-

related measures.

Article 4

Form of financial assistance

The financial assistance shall take the form of a loan granted by the

Union to the Member State concerned. To that end, and in accordance

with a Council implementing decision adopted pursuant to Article

6(1), the Commission shall be empowered to borrow on the capital

markets or with financial institutions on behalf of the Union at the

most appropriate time so as to optimise the cost of funding and

preserve its reputation as the Union’s issuer in the markets.

Article 5

Maximum amount of financial assistance

The maximum amount of financial assistance shall not exceed EUR

100 000 000 000 for all Member States.

Article 6

Procedure for requesting financial assistance

1. Financial assistance shall be made available by means of a

Council implementing decision adopted on the basis of a proposal

from the Commission.

2. Before submitting a proposal to the Council, the Commission

shall consult the Member State concerned without undue delay to

verify the sudden and severe increase in actual and possibly also

planned public expenditure directly related to short-time work

schemes and similar measures, as well as, where appropriate, to

relevant health-related measures, in the Member State requesting

financial assistance which are linked to the exceptional occurrence

caused by the COVID-19 outbreak. To that end, the Member State

concerned shall provide the Commission with appropriate evidence. In

addition, the Commission shall verify compliance with the prudential

rules laid down in Article 9.

3. The Council implementing decision referred to in paragraph 1

shall contain

(a) the amount of the loan, its maximum average

maturity, its pricing formula, its maximum number of

instalments, its availability period and the other detailed rules

needed for the granting of the financial assistance;

(b) an assessment of the compliance by the Member

State with the conditions set out in Article 3; and

(c) a description of the national short-time work schemes

or similar measures, as well as, where appropriate, of the

relevant health-related measures, that may be financed.

4. When adopting an implementing decision as referred to in

paragraph 1, the Council shall consider existing and expected needs of

the requesting Member State, as well as requests for financial

assistance pursuant to this Regulation already submitted or planned to

be submitted by other Member States, while applying the principles of

equal treatment, solidarity, proportionality and transparency.

Article 7

Disbursement of the loan granted under the Instrument

The loan granted under the Instrument (‘loan’) shall be disbursed in

instalments.

Article 8

Borrowing and lending operations

1. The borrowing and lending operations under the Instrument

shall be carried out in euros.

2. The characteristics of the loan shall be agreed in a loan

agreement between the beneficiary Member State and the Commission

(the ‘loan agreement’). Such agreements shall contain the provisions

set out in Article 220(5) of Regulation (EU, Euratom) 2018/1046.

3. At the request of the beneficiary Member State and where

circumstances permit an improvement in the interest rate on the loan,

the Commission may refinance all or part of its initial borrowing or

restructure the corresponding financial conditions.

4. The Economic and Financial Committee shall be kept

informed of a refinancing or restructuring as referred to in paragraph 3.

Article 9

Prudential rules applicable to the portfolio of loans

1. The share of loans granted to the three Member States

representing the largest share of the loans granted shall not exceed 60

per cent of the maximum amount referred to in Article 5.

2. The amounts due by the Union in a given year shall not

exceed 10 per cent of the maximum amount referred to in Article 5.

3. Where necessary, the Commission may roll over the

associated borrowings contracted on behalf of the Union.

Article 10

Administration of the loans

1. The Commission shall establish the necessary arrangements

for the administration of the loans with the European Central Bank.

2. The beneficiary Member State shall open a special account

with its national central bank for the management of the financial

assistance received. It shall also transfer the principal and the interest

due under the loan agreement to an account with the European System

o f C e n t r a l B a n k s 2 0 TA R G E T 2 b u s i n e s s d a y s p r i o r t o t h e

corresponding due date.

Article 11

Contributions to the Instrument in the form of guarantees from

Member States

1. Member States may contribute to the Instrument by counter-

guaranteeing the risk borne by the Union.

2. Contributions from Member States shall be provided in the

form of irrevocable, unconditional and on-demand guarantees.

3. The Commission shall conclude an agreement with a

contributing Member State on the irrevocable, unconditional and on-

demand guarantees referred to in paragraph 2. Such agreements shall

set out the payment conditions.

4. Calls on guarantees provided by Member States shall be made

pro rata to the relative share of each Member State in the gross national

income of the Union as referred to in Article 12(1). Where a Member

State fails, in full or in part, to honour a call in time, the Commission,

in order to cover for the part corresponding to the Member State

concerned, shall have the right to make additional calls on guarantees

to other Member States. Such calls shall be made pro rata to the

relative share of each of the other Member States in the gross national

income of the Union as referred to in Article 12(1) and adapted

without taking into account the relative share of the Member State

concerned. The Member State which failed to honour the call shall

remain liable to honour it. The other Member States shall be

reimbursed for additional contributions from the amounts recovered by

the Commission from the Member State concerned. The guarantee

called from a Member State shall be limited, in all circumstances, by

the overall amount of guarantee contributed by that Member State

under the agreement referred to in paragraph 3.

5. Before calling on guarantees provided by the Member States,

the Commission, at its sole discretion and responsibility as the Union

institution entrusted with the implementation of the general budget of

the Union in accordance with Article 317 TFEU, is expected to

examine the scope for drawing on the margin available under the own-

resources ceiling for payment appropriations to the extent that it is

deemed sustainable by the Commission, having regard, inter alia, to

the total contingent liabilities of the Union, including under the

balance of payments facility established by Regulation (EC) No 332/

2002, and the sustainability of the general budget of the Union. Such

examination shall not affect the irrevocable, unconditional and on-

demand nature of the guarantees provided pursuant to paragraph 2. In

the call on guarantees, the Commission shall inform the Member

States about the extent to which the margin has been drawn.

In this Act, unless the context otherwise requires:-

Interpretation.

"Guarantee Agreement" means the Voluntary Guarantee

Agreement which may be entered into pursuant to Article 11 of

Council Regulation (EU) 2020/672 of 19 May 2020 on the

establishment of a European instrument for temporary support to

mitigate unemployment risks in an emergency (SURE) following

the COVID-19 outbreak, reproduced in the Second Schedule;

"Instrument" means the European instrument for

temporary support to mitigate unemployment risks in an

emergency (SURE), established by virtue of Council Regulation

(EU) 2020/672 of 19 May 2020 on the establishment of a

European instrument for temporary support to mitigate

unemployment risks in an emergency following the COVID-19

outbreak, reproduced in the First Schedule.

"Malta" has the same meaning assigned to it by article 124

of the Constitution of Malta;

"Minister" means the Minister responsible for finance.

click here to view the Guarantee Agreement

Passed by the House of Representatives at Sitting No. 354 of the 8th

July, 2020.

CLAUDETTE BUTTIGIEG

Deputy Speaker

RAYMOND SCICLUNA

Clerk of the House of Representatives

THE EUROPEAN COMMISSION

AND

THE REPUBLIC OF MALTA

VOLUNTARY GUARANTEE AGREEMENT

PURSUANT TO ARTICLE 11 OF COUNCIL

REGULATION (EU) 2020/672

SURE – EUROPEAN INSTRUMENT FOR

TEMPORARY SUPPORT TO MITIGATE

UNEMPLOYMENT RISKS IN AN EMERGENCY

FOLLOWING THE COVID-19 OUTBREAK

...

CONTENTS

Page

Clause

1. Guarantee and Indemnity ............................................................................................... 2

2. Preservation of Rights .................................................................................................... 4

3. Information Undertakings .............................................................................................. 5

4. Benefit of the Guarantee Agreement ............................................................................. 5

5. Reduction and Expiry of the Guarantee ......................................................................... 5

6. Interpretation in Conformity and Partial Invalidity ....................................................... 6

7. Notices ........................................................................................................................... 6

8. Interpretation .................................................................................................................. 7

Subject to the provisions of this Act, the Government of Malta

may issue unconditional, irrevocable and on-demand guarantees to the

European Union by entering into a voluntary guarantee agreement

with the European Commission pursuant to Article 11 of Council

Regulation (EU) 2020/672 of 19 May 2020 on the establishment of a

European instrument for temporary support to mitigate unemployment

risks in an emergency (SURE) following the COVID-19 outbreak to

enable Malta to contribute to the Instrument.

GUARANTEED CONTRIBUTION

Member State

Amount (EUR)

Kingdom of Belgium

838 224 250

Republic of Bulgaria

107 466 500

Czech Republic

374 538 500

Kingdom of Denmark

563 837 750

Federal Republic of Germany

6 383 820 000

Republic of Estonia

48 716 500

Ireland

483 401 250

Hellenic Republic

342 618 750

Kingdom of Spain

2 252 890 750

French Republic

4 406 976 250

Republic of Croatia

95 693 500

Italian Republic

3 183 786 000

Republic of Cyprus

38 114 750

Republic of Latvia

57 070 750

Republic of Lithuania

83 953 500

Grand Duchy of Luxembourg

76 856 750

Hungary

249 596 000

Republic of Malta

23 044 250

Kingdom of the Netherlands

1 441 199 500

Republic of Austria

717 215 750

Republic of Poland

930 103 250

Portuguese Republic

365 571 000

Romania

393 384 250

Republic of Slovenia

88 126 500

Slovak Republic

173 516 250

Republic of Finland

431 740 250

Kingdom of Sweden

848 537 250

Total

25 000 000 000

...

-9-

(1) Any guarantee issued in accordance with article 3 shall

be subject to the terms incorporated in the voluntary guarantee

agreement

Provided that the guarantee issued by the Government of

Malta shall not exceed the aggregate amount of euro twenty-three

million, forty-four thousand two hundred and fifty euro (€23,044,250).

(2) Any guarantee issued by the Government of Malta relating to

the Instrument beyond the purpose specified under sub-article (1) may

only be done in such manner and for such purpose as the House of

Representatives may by resolution determine.

GUARANTEE CONTRIBUTION KEY

(the relative shares of Member States in the total Gross National Income of the Union,

as resulting from the column (1) of Table 3 of Part A “Introduction and financing of the

general budget of the Union”, of the revenue part of the budget for 2020 set out in the

general budget of the European Union for the financial year 2020, as adopted on 27

November 2019)

Member State

Guarantor's Contribution Key

Percentage

Kingdom of Belgium

3.352 897%

Republic of Bulgaria

0.429 866%

Czech Republic

1.498 154%

Kingdom of Denmark

2.255 351%

Federal Republic of Germany

The Annexes to this Act may be made in the English language

only.

Amounts resulting from calls on guarantees referred to in

paragraph 2 shall constitute external assigned revenue for the

Instrument in accordance with Article 21(5) of Regulation (EU,

Euratom) 2018/1046.

Article 12

Availability of the Instrument

1. The Instrument shall only become available after all Member

States have contributed to the Instrument in accordance with Article 11

for an amount representing at least 25 per cent of the maximum

amount referred to in Article 5, provided that the relative shares of

contributions of each Member State of the overall amount of Member

States’ contributions correspond to the relative shares of Member

States in the total gross national income of the Union, as resulting from

column (1) of Table 3 of Part A (‘Introduction and financing of the

general budget’) of the revenue part of the budget for 2020 set out in

the general budget of the Union for the financial year 2020, as adopted

on 27 November 2019 * .

2. The Commission shall inform the Council when the

Instrument becomes available.

3. The period of availability of the Instrument during which a

decision referred to in Article 6(1) may be adopted shall end on 31

December 2022.

4. Where the Commission concludes in the report referred to in

Article 14 that the severe economic disturbance caused by the COVID-

19 outbreak affecting the financing of measures referred to in Article 1

continues to exist, the Council, on a proposal from the Commission,

may decide to extend the period of availability of the Instrument, each

time for an additional period of six months.

Article 13

Control and audits

1. The loan agreement shall contain the necessary provisions

regarding controls and audits as required by Article 220(5) of

Regulation (EU, Euratom) 2018/1046.

2. Where a request for financial assistance submitted in

accordance with Article 3(1) is, fully or in part, based on planned

public expenditure, the beneficiary Member State shall, every six

months, inform the Commission about the implementation of such

* Definitive adoption (EU, Euratom) 2020/227 of the European Union’s general

budget for the financial year 2020 (OJ L 57, 27.2.2020, p. 1).

planned public expenditure.

Article 14

Reporting

1. Within six months of the day on which the Instrument

becomes available in accordance with Article 12 and every six months

thereafter in the context of Article 250 of Regulation (EU, Euratom)

2018/1046, the Commission shall forward to the European Parliament,

the Council, the Economic and Financial Committee and the

Employment Committee a report on the use of financial assistance,

including outstanding amounts and the applicable repayment schedule

under the Instrument, and on the continuation of the exceptional

occurrences that justify the application of this Regulation.

2. Where appropriate, the report referred to in paragraph 1 shall

be accompanied by a proposal for a Council implementing decision

extending the period of availability of the Instrument.

Article 15

Applicability

1. This Regulation shall not be applicable to or in the United

Kingdom.

2. References to ‘Member States’ in this Regulation shall not be

understood to include the United Kingdom.

Article 16

Entry into force

This Regulation shall enter into force on the date of its publication

in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly

applicable in all Member States.

Done at Brussels, 19 May 2020.

For the Council

The President

G. GRLIĆ RADMAN

Law and Jurisdiction ...................................................................................................... 7

...

- ii -

THIS GUARANTEE AGREEMENT is between

(1)

[•], (“Guarantor”) one of the Member States of the European Union listed in Schedule

1; and

(2)

The European Commission (“the Commission”)

Respectively a Party to this agreement.

WHEREAS

Council Regulation (EU) 2020/672 on the establishment of a European instrument for

temporary support to mitigate unemployment risks in an emergency (SURE) following

the COVID-19 outbreak (“Council Regulation (EU) 2020/672”) permits the Union,

under circumstances contained therein, to make available financial assistance up to a

maximum amount of EUR 100 000 000 000 to Member States of the European Union

in the form of a loan facility according to a loan agreement ("Loan Agreement").

According to Article 6(1) of Council Regulation (EU) 2020/672, such financial

assistance is to be made available by means of a Council implementing decision.

Council Regulation (EU) 2020/672 has empowered the Commission on behalf of the

Union to borrow on the capital markets and with financial institutions in order to

finance the loan facilities (“Borrowings”).

In the event of a partial or total non-payment under a Loan Agreement, the Union may

risk not to have available sufficient resources to fulfil the payment obligations arising

from the Borrowings.

Council Regulation (EU) 2020/672 provides that the Member States of the European

Union listed in Schedule 1 (together called the “Guarantors”) may contribute to SURE

by counter-guaranteeing the risk borne by the Union and that such contributions shall

be provided in the form of irrevocable, unconditional and on-demand guarantees.

Article 11(3) of Council Regulation (EU) 2020/672 provides that the Commission is to

conclude an agreement with a contributing Member State on the irrevocable,

unconditional and on-demand guarantee, and that such agreement is to set out the

payment conditions (a “Guarantee Agreement”).

Article 11(4) of Council Regulation (EU) 2020/672 provides that a Member State who

has failed to honour a call shall remain liable to honour it.

Article 12(1) of Council Regulation (EU) 2020/672 provides that financial assistance

shall only become available after all Member States have contributed to SURE by

means of a Guarantee Agreement.

Each Member State of the European Union remains fully and individually liable for the

commitments that it has made in a Loan Agreement or under a Guarantee Agreement.

...

-1-

1. GUARANTEE AND INDEMNITY

Guarantee

The Guarantor hereby unconditionally and irrevocably guarantees to the Union the due

and punctual payment on demand of up to 100 per cent of its contribution (the

"Guaranteed Contribution") and accordingly undertakes to pay to the Union, within

ten (10) Business Days (or such shorter period as is specified in this Guarantee

Agreement) of receiving a written demand from the Commission in accordance with

this Guarantee Agreement (a "Demand") up to 100 per cent of its Guaranteed

Contribution.

This Guarantee Agreement is solely related to Borrowings and the associated Loan

Agreements that are authorised by a decision adopted by the Council before 31

December 2022 taken under Council Regulation (EU) 2020/672 as originally adopted.

Any other Union borrowings on capital markets and with financial institutions and loan

agreements shall not give rise to any claim or liability under this Guarantee Agreement.

Subject to Clause 5.1, the Guaranteed Contribution of the Guarantor is equal to the

value set out next to the Guarantor's name in Schedule 1 to this Guarantee Agreement.

The Guarantee Contribution Key Percentage of the Guarantor is equal to the percentage

set out next to the Guarantor's name in Schedule 2 to this Guarantee Agreement.

The cumulative total value of any or all Demanded Amounts and Additional Demanded

Amounts (as defined by Clauses 1.6 and 1.7 respectively) on the Guarantor may never

exceed the Guaranteed Contribution of the Guarantor. The Guarantor shall not be liable

to pay an amount in excess of its Guaranteed Contribution.

The obligations of the Guarantor under this Guarantee Agreement and of other

Guarantors under their respective Guarantee Agreements are several only.

A Demand under this Guarantee may be made by the Commission at any time before

or after a scheduled interest payment or a scheduled principal payment or other amount

is due (together the “Amount Due”) under Borrowings, if

(i)

the Union (for whatsoever reason) has not received in full a scheduled payment

as and when due under a Loan Agreement from a Member State of the European

Union being financed by Borrowings or it is notified by such Member State or

becomes aware following an event of default under the Loan Agreement that such

Member State will not or will not be able to make payment in full of a scheduled

payment under such a Loan Agreement as and when due; and

(ii)

an Amount Due is, has been or will be due under Borrowings.

In such an event, the Commission shall at its sole discretion determine an amount to be

called from the Guarantors (“Amount of the Call”), up to a maximum of the Amount

Due, to ensure that the Union has sufficient resources to make the necessary payment.

In determining the Amount of the Call, the Commission shall draw any amount, which

may be zero, that the Commission considers in its sole discretion, having regard inter

alia to the total contingent liabilities of the Union (including under the Balance of

...

-2-

Payment Facility) and the sustainability of the Union budget, that may be available

under the own resources ceiling for payment appropriations.

The Commission shall make Demands on all Guarantors. The Demands shall be pro

rata to the relative share of each Guarantor in the Guarantee Contribution Key.

Any Demand shall specify the Amount Due, the extent to which amounts under the own

resources ceiling for payment appropriations have been drawn and the Amount of the

Call and shall request in writing the Guarantor to transfer an amount equal to its

Guarantee Contribution Key Percentage of the Amount of the Call (such amount being

the “Demanded Amount”), in cleared funds to the account referred to in Clause 1.9.

The Demanded Amount shall comply with Clause 1.4. The Guarantor unconditionally

and irrevocably guarantees to the Commission the due and punctual payment of the

Demanded Amount on demand and the Guarantor shall transfer the Demanded Amount

in accordance with the terms of such Demand. The transfer shall occur within ten (10)

Business Days.

As per the Loan Agreement, the Member State referred to in Clause 1.6(i) shall within

two (2) Business Days of the Demand being made notify to the Commission its ability

to meet the Demand.

In the event that any one or more of the Guarantors does not pay its Demanded Amount

or the Member State referred to in Clause 1.6(i) has notified its inability to meet the

Demand or has failed to notify its ability (the unpaid amount being the "Additional

Shortfall"), the Commission shall make a further Demand (or Demands) (such

Demand(s) being the “Additional Demand(s)”) on the other Guarantors to pay their

Adjusted Payment Contribution Key Percentage of the Additional Shortfall(s) (the

“Additional Demanded Amount”). For the purpose of this Clause 1.67, the Adjusted

Payment Contribution Key Percentage of a Guarantor means the Guarantee

Contribution Key Percentage of each Guarantor adjusted on a pro rata pari passu basis

the non-paying Guarantor(s), however, being excluded such that its/their Adjusted

Payment Contribution Key Percentage is equal to zero for this purpose such that the

aggregate of the Adjusted Payment Contribution Key Percentage of the remainder of

the Guarantors is equal to 100 per cent.

The Commission shall make Additional Demands on all Guarantors pro rata to the

relative share of each of the other Guarantors in the Guarantee Contribution Key, as

adapted so as to not take into account the relative share of the Guarantor having failed

to honour its duty.

Any Additional Demand shall specify the Additional Shortfall and shall request in

writing the Guarantor to transfer an amount equal to Additional Demanded Amount, in

cleared funds to the account referred to in Clause 1.9. The Additional Demanded

Amount shall comply with Clause 1.4. The Guarantor unconditionally and irrevocably

guarantees to the Commission the due and punctual payment of the Additional

Demanded Amount on demand and the Guarantor shall transfer the Additional

Demanded Amount in accordance with the terms of such Additional Demand. The

transfer shall occur within ten (10) Business Days or such time such that sufficient

funds have been paid to the account specified in Clause 1.9 to permit payment in full

the Amount Due on the scheduled date of payment or, in the event of such an Additional

Demand being made by the Commission after the scheduled date of payment, prior to

...

-3-

the expiry of the grace period for non-payment of such amount set out in the Borrowings

(in each case provided that the Additional Demand is made more than five (5) Business

Days prior to the scheduled due date of the required payment, and, if this is not the case,

such Additional Demand shall be paid no later than the fifth (5 th ) Business Day

following the date of receipt of such Additional Demand). This Clause 1.7 shall apply

cumulatively mutatis mutandis if one or more Guarantors do not pay their respective

Adjusted Contribution Key Percentage of an Additional Shortfall.

Following a Demand or Additional Demand, the Commission shall initiate recovery

proceedings in respect of the Loan Agreement and, if applicable, the Guarantee

Agreement. The Commission shall reimburse the Guarantor from amounts recovered

by the Commission in respect of the Loan Agreements or Guarantee Agreements. For

amounts recovered following a Demand or an Additional Demand on the Guarantor,

the Commission shall by notice request payment details of the Guarantor and upon their

receipt reimburse the Guarantor within ten (10) Business Days for any amount provided

under the respective Demand or Additional Demand. In the case of a recovery in several

instalments, the Guarantor will be reimbursed in proportion to the Guarantor’s

contribution to the Shortfall or Additional Shortfall. In such a case, priority will be

given to repay Additional Demands and only once fully satisfied will Demands be

satisfied.

Payments under this Guarantee Agreement shall be made to the account as identified in

each Demand.

The Guarantor is not entitled to set-off or deduct any amounts owed to it by the Union

from any payments due by the Guarantor under this Guarantee Agreement.

2. PRESERVATION OF RIGHTS

Continuing obligations

The obligations of the Guarantor herein contained shall constitute and be continuing

obligations notwithstanding any settlement of account or other matter or thing

whatsoever and shall not be considered satisfied by any intermediate payment or

satisfaction of all or any of the Union's obligations under or in respect of any

Borrowings and shall continue in full force and effect for so long as and until all sums

due from the Union in respect of the Borrowings have been paid, and all other actual or

contingent obligations of the Union thereunder or in respect thereof have been satisfied,

in full provided that each Guarantor shall only be liable for its Guaranteed Contribution.

Obligations not discharged

The obligations of the Guarantor herein contained shall not be discharged, impaired or

otherwise affected by

Indulgence, Waivers or Consents: time or other indulgence or any waiver or

2.2.1

consent being granted or agreed to be granted to the Union or to the Commission

in respect of any of its obligations under or in respect of any Borrowings and/or

Loan Agreement;

...

-4-

Amendment: any amendment, novation, supplement, extension, (whether of

2.2.2

maturity or otherwise) or restatement (in each case, however fundamental and

of whatsoever nature) or replacement, waiver or release of, any obligation of

the Union under or in respect of any Borrowings or any security or other

guarantee or indemnity in respect thereof including without limitation any

extension of or any increase of the obligations of the Union in respect of any

Borrowings or the addition of any new obligations for the Union provided that

none of the foregoing shall result in any increase of the Guarantor's liability

under this Guarantee Agreement; or

Pari passu

The Guarantor undertakes that its obligations hereunder will at all times rank pari passu

with all other present and future, direct, unconditional, unsubordinated and unsecured

obligations of such Guarantor.

Subrogation of Guarantor’s Rights

Acknowledging that this Guarantee Agreement does not guarantee the repayment of a

Loan Agreement, the Guarantor acknowledges that it is not entitled to any rights of

subrogation.

3. INFORMATION UNDERTAKINGS

The Commission shall inform the General Secretariat of the Council of the European

Union of the signature of the Guarantee Agreement.

The Commission shall report to the Guarantors on the outstanding claims under Loan

Agreements and liabilities under Borrowings on a quarterly basis.

The Commission shall immediately notify the Guarantors of becoming aware of any

event that may reasonably be expected to result in a call under the Guarantee

Agreement.

4. BENEFIT OF THE GUARANTEE AGREEMENT

Benefit

The Guarantor shall honour this Guarantee Agreement on demand.

Assignment

The Guarantor shall not be entitled to assign or transfer all or any of their rights, benefits

and obligations hereunder.

5. REDUCTION AND EXPIRY OF THE GUARANTEE

From 31 st December 2025, should a Commission report referred to in Clause 3.2

provide that the outstanding liabilities under Borrowings is less than EUR 25 000 000

000, the Guaranteed Contributions from Guarantors shall irrevocably be reduced on a

pro rata pari passu basis so that the total Guaranteed Contributions from Guarantors is

...

-5-

equal to the outstanding liabilities under Borrowings. From its date of application, this

Clause 5.1 shall apply to each report.

Subject to Clause 5.3, this Guarantee Agreement shall expire on the date (the

"Expiration Date") which is the earlier of (i) the date when all Borrowings have been

irrevocably paid in full, no further Borrowings may be issued under Council Regulation

(EU) 2020/672 and any and all obligations of the Guarantor have been fully and

irrevocably paid and (ii) 31 st December 2053.

In the event of any Demand or Additional Demand under this Guarantee Agreement,

the obligation of the Commission to reimburse the Guarantor from amounts recovered

in line with Clause 1.8 shall continue until there is a reimbursement in full

notwithstanding the occurrence of the Expiration Date.

6. INTERPRETATION IN CONFORMITY AND PARTIAL INVALIDITY

All provisions hereof shall be interpreted, in case of doubt, so that they are in

conformity with the governing law. If at any time any provision hereof is or becomes

illegal, invalid or unenforceable under the governing law, the legality, validity or

enforceability of the remaining provisions hereof shall not in any way be affected or

impaired thereby.

7. NOTICES

Address for notices

All notices, demands and other communications to the Guarantor hereunder shall be

made in writing (by letter or fax or e-mail) and shall be sent to the Guarantor at

[Guarantor's address]

Fax

+[number]

E-mail

[e-mail]

Attention

[name or department]

With a copy to

European Commission

Fax

+[number]

E-mail

[e-mail]

Attention

[name or department]

or, in relation to the Guarantor, to such other address or fax number or for the attention

of such other person or department as the Guarantor has notified to the Commission in

the manner prescribed for the giving of notices.

...

-6-

Effectiveness

Every notice, demand or other communication sent in accordance with Clause 7.1

(Address for notices) shall be effective upon actual receipt by the Guarantor; provided

that any such notice, demand or other communication which would otherwise take

effect after 4.00 p.m. on any particular day or on a day which is not a Business Day

shall not take effect until 10.00 a.m. on the immediately succeeding Business Day.

8. INTERPRETATION

Definitions

In this Guarantee Agreement

"Business Day" shall mean a day on which commercial banks and foreign exchange

markets are open or required to be open for business in Luxembourg.

Other agreements

All references in this Guarantee Agreement to an agreement, instrument or other

document shall be construed as a reference to that agreement, instrument or other

document as the same may be amended, supplemented, restated, extended, replaced or

novated from time to time.

9. LAW AND JURISDICTION

Governing law

This Guarantee Agreement and any non-contractual obligations arising out of or in

connection with it shall be governed by and shall be construed in accordance with

European Union law, supplemented if necessary by the Luxembourgish law.

Exclusive Jurisdiction

The Court of Justice of the European Union, in accordance with Article 272 of the

Treaty on the Functioning of the European Union, shall have exclusive jurisdiction to

settle any dispute (a "Dispute"), arising out of or in connection with this Guarantee

Agreement (including a dispute relating to the existence, validity or termination of this

Guarantee Agreement or any non-contractual obligation arising out of or in connection

with this Guarantee Agreement) or the consequences of its nullity.

All Clauses and terms stipulated herein have been duly noted and approved by [•][in line with

• 1 ] and the Commission. This Guarantee Agreement shall enter into force upon the date of

signature by the last Party.

Done in two originals, one for the Guarantor and for the Commission.

EXECUTED as a guarantee

Reference to national legal base for signature if necessary for the Guarantor Member State.

...

-7-

by THE REPUBLIC OF MALTA

Represented by

[NAME]

[POSITION]

[DATE OF SIGNATURE]

EXECUTED as a guarantee

by the European Commission

Represented by

[NAME]

[POSITION]

[DATE OF SIGNATURE]

...

-8-

535 280%

Republic of Estonia

0.194 866%

Ireland

1.933 605%

Hellenic Republic

1.370 475%

Kingdom of Spain

9.011 563%

French Republic

17.627 905%

Republic of Croatia

0.382 774%

Italian Republic

12.735 144%

Republic of Cyprus

0.152 459%

Republic of Latvia

0.228 283%

Republic of Lithuania

0.335 814%

Grand Duchy of Luxembourg

0.307 427%

Hungary

0.998 384%

Republic of Malta

0.092 177%

Kingdom of the Netherlands

5.764 798%

Republic of Austria

2.868 863%

Republic of Poland

3.720 413%

Portuguese Republic

1.462 284%

Romania

1.573 537%

Republic of Slovenia

0.352 506%

Slovak Republic

0.694 065%

Republic of Finland

1.726 961%

Kingdom of Sweden

3.394 149%

Total

100.000 000%

...

- 10 -

€1.98