On the 2nd April, European Commission President Ursula van der Leyen presented a new set of measures taken by the European Commission to respond to the coronavirus outbreak. These new action complements the ones adopted already in March. Here is a (non-exhaustive) overview of the EU actions to address the current situation:
Addressing the economic impact:
- Back in March, the Commission adopted a €37 billion Coronavirus Response Investment Initiative: to support the European healthcare sector, the labour market and SMEs from all affected sectors. In April, the Commission adopted the Coronavirus Response Investment Initiative Plus initiative allows for the mobilisation of all non-utilised support from the Structural Funds (European Regional Development Fund and European Social Fund) and the Cohesion Fund to address the effects of the public health crisis on our economies and societies.
- Adoption of the general escape clause of the Stability and Growth Pact, which provide Member States with the flexibility to undertake measures to deal adequately with the crisis, while departing from the budgetary requirements that would normally apply under the European fiscal framework. Since then, the European Commission has been approving numerous national schemes to support the economy. Here is a list of measures taken by each Member States to respond to the current crisis.
- Already announced in March, the Commission unlocked 1 billion € from the European Investment fund as guarantee for banks and other lenders to provide liquidity to at least 100.000 SMEs for an estimated 8 billion Euros.
- In addition, the European Commission launched SURE – EU funding for short time work Scheme. SURE is a solidarity instrument of a 100 billion Euros loans to support Member States who need to their short term work Scheme.
- More flexibility is provided for the use of EU structural funds, as well as the for the use of the European Maritime and Fisheries Fund, in particular to support farmers and fishermen to preserve the food supply chain.
Addressing the public health crisis
- The European Commission also announced that all uncommitted money from the three EU Cohesion Policy funds – the European Regional Development Fund, the European Social Fund and the Cohesion Fund – will be mobilised to address the effects of the public health crisis.
- The Commission is also proposing an emergency support instrument: The EU is today proposing to use all available remaining funds from this year’s EU budget to help to respond to the needs of European health systems. €3 billion will be put into the Emergency Support Instrument, of which €300 million will be allocated to RescEU to support the common stockpile of equipment. The first priority would be managing the public health crisis and securing vital equipment and supplies, from ventilators to personal protective gear, from mobile medical teams to medical assistance for the most vulnerable, including those in refugee camps. The second area of focus would be on enabling the scaling up of testing efforts. The proposal would also enable the Commission to procure directly on behalf of the Member States.
- The Commission has temporarily waived customs duties and VAT on the import of medical devices, and protective equipment, from third countries.
- Several EU mechanisms enables the deployment of medical support from different Member Sates towards the most affected areas, and co-finance European assistance from a Member States to the other.
A Global response:
- The Commission adopted on the 8th of April a Global EU response to COVID-19 programme. The programme is a combination of direct budget support, loans and guarantees from the European Investment Bank and the European Bank for Reconstruction and Development, for 15.6 billion €, aimed at African countries and other EU partners. The money mainly originates from the reorientation of existing funds and programmes.
The European Commission has set up a dedicated website on the Coronavirus response.
Finance ministers of the Eurozone have met (virtually) multiple times to find an agreement on an economic package to tackle the economic impact of the coronavirus. On Thursday 9th, the Eurogroup agreed on a 540B €, after several days of negotiations. In addition, in the coming days Ministers will have to agree on a recovery plan to relaunch the economy once the pandemic starts receding, including the divisive issue joint debt issuance, or so-called ‘coronabonds’.