By Lisa Burgess • 13 March 2020 • 16:28
The EU Commission has today released a report today on the Commission’s coordinated response to counter the economic impact of the Coronavirus.
The report begins by saying that COVID-19 is a severe public health emergency for its citizens, societies and economies with infections in all member states. The report is in immediate response to mitigate the socio-economic impact of the COVID-19 outbreak, centred on a European coordinated response.
Highlights of intended assistance include the following:
President of the European Union, Ursula von der Leyen said “the coronavirus pandemic is testing us all. The important economic package announced today deals with the situation of today. We stand ready to do more as the situation evolves. We will do whatever is necessary to support the Europeans and the European economy”.
The report goes on to say the main fiscal response to the Coronavirus will come from the Member States’ national budgets. However, the impact of COVID-19 on Italy is of a nature and scale that allows the use of Article 107(3)(b) TFEU. This enables the Commission to approve additional national support measures to remedy a serious disturbance to the economy of a member state.
The Commission will propose to the Council to apply the full flexibility provided in the EU fiscal framework. It considers that the COVID-19 pandemic qualifies as an “unusual event outside the control of government”. This allows for extra spending on healthcare, firms and workers.
They will also recommend adjusting the fiscal efforts required from Member States in case of negative growth or large drops in activity. The Commission will trigger the general escape clause. This clause would – in cooperation with the Council – suspend the fiscal adjustment recommended by the Council in the case of a severe economic downturn in the EU.
The report discusses ensuring solidarity in the Single Market with a European wide coordinated solution to this public health emergency. It further discusses transport systems and ensuring flow of essential goods across land borders.
The Commission is proposing targeted legislation to temporarily alleviate airlines from the “use it or lose it” rule – whereby air carriers must use at least 80% of their airport slots.
Importantly, they will be liaising with Member States specifically monitoring the impact of the crisis on the tourism sector.
Other highlights include EUR 1 billion being redirected from the EU budget as a guarantee to the European Investment Fund to incentivise banks to provide liquidity. This will help at least 100,000 European SMEs and small mid-caps with about EUR 8 billion of financing.
The report discusses employment issues including unemployment and loss of income with solutions such as short-time work schemes, upskilling and reskilling programmes. It will accelerate the preparation of the legislative proposal for a European Unemployment Reinsurance Scheme supporting Member State policies.
Up to 179 million will be made available to support dismissed workers and self-employed with the European Globalisation Adjustment Fund.
There will be a new initiative called the Coronavirus Response Investment Initiative. This will direct EUR 37 billion under Cohesion policy to the fight against the coronavirus. The Commission calls upon the European Parliament to swiftly approve this proposal. It is also proposing to extend the scope of the EU Solidarity Fund to help hardest hit Member States. Up to EUR 800 million could be made available in 2020.
Share this story
Subscribe to our Euro Weekly News alerts to get the latest stories into your inbox!
By signing up, you will create a Euro Weekly News account if you don't already have one. Review our
Download our media pack in either English or Spanish.