EU level

In this section you will find the latest news on what the EU is doing to address the Coronavirus crisis.  The page is updated continuously. Please find below the latest news.  

Latest news:

4 June:

Following the publication of the Commission’s plan for recovery and its updated Work Program for 2020, the Commission has resumed its work on the priority policy files with the publication of various public consultations. At the same time, Germany is preparing for its ‘corona-Presidency’, starting on 1 July, and has launched the website for its upcoming six-month Presidency of the Council of the EU.

Commission priorities

The updated Work Program sees minimum delays for the Commission’s digital policy agenda in order to make Europe ‘fit for the digital age’. This week, the EU’s executive arm opened a public consultation on the new Digital Services Act (DSA), that aims to update the regulatory framework for the digital economy. The legislative proposal for the DSA is expected to be published in Q4 2020. Moreover, the Commission published an impact assessment and public consultation to explore the need for a new competition tool for, amongst others, digital platforms. Furthermore, the digital finance initiatives, including an Action Plan on Fintech and a legislative proposal on Crypto Assets, remain on the agenda for Q3 this year.

German Presidency of the Council of the EU

The COVID-19 crisis has forced Germany to revise its priorities for the upcoming Presidency of the Council of the EU in the second half of 2020, starting on 1 July. As the German Presidency will focus mainly on crisis management and guiding the upcoming budget negotiations, some have already dubbed the German mandate the ‘corona-Presidency’. As if the budget negotiations do not already present enough challenges, the negotiations will also bring logistical difficulties, as face-to-face meetings are still not possible. Berlin already announced one can expect a reduction of 70% in capacity for meetings that would normally be held in Brussels.

Germany, Portugal and Slovenia, the three upcoming Council presidencies, are rumored to have adopted a joint proposal for the Council’s priorities for the next 18 months. The proposal reads that the presidencies will “as an overarching priority, implement all appropriate measures serving a robust recovery of the European economy”. The official Work Program of the German Presidency is expected to be published soon.

Initiatives at EU level

  • On 3 June, the Commission proposed modifications to its budget for 2020 to make €11.5 billion available for crisis repair and recovery. The additional budget will be used to help the regions most affected, support businesses and those in need outside the EU;
  • Spokesperson of European Council President Charles Michel, Barend Leyts, stated that the European Council of 19 June on the MFF and Recovery Fund will take place via videoconference. Major breakthroughs in the negotiations are expected only as soon as the leaders will be able to hold a physical meeting, but this will thus not happen shortly. German chancellor Merkel stated she expects a deal would not come in June but only in fall 2020;
  • Commissioner Johannes Hahn has stated that the new Single Market tax would target below 0.2% of turnover of companies with a global turnover above €750 million;
  • Eurostat figures show that the unemployment rate in April has increased only modestly after governments massively invested in short-time work schemes. The EU’s unemployment rate climbed to 6.6% and the euro countries to 7.3%, both increasing with 0.2 percentage points;
  • The European Commission opened a second-stage consultation of European trade unions and employers’ organizations on how to ensure fair minimum wages in the EU. The Commission insists that minimum wages are crucial to the economic recovery from the COVID-19 pandemic;
  • The Commission approved another national support scheme under the Temporary Framework for state aid:
    • Poland introduced a €1.6 billion support scheme to compensate companies for damages suffered due to the COVID-19 outbreak. The support will be given in the form of subsidized loans at favorable interest rates.

29 May:

  • This week in EU politics marks a milestone in the EU’s response to the COVID-19 outbreak and the long-term priorities of the EU. After months of contingency measures and coordination efforts of the European Commission, the €750 billion Next Generation EU recovery fund and the reinforced Multiannual Financial Framework (MFF) 2021-2027 will have to put the EU on the path towards long-term economic recovery, in line with its green and digital ambitions.
  • The next weeks are expected to build upon the plans as presented this week. On 11 June, the Eurogroup will convene to discuss the proposal put forward by the European Commission and on 18 and 19 June the EU leaders will convene for the European Council Summit to enter of the most challenging round of negotiations in the EU’s history. Officials from Germany and France already stressed that an agreement should be closed before autumn of this year to give national parliaments and the European Parliament enough time to discuss and ratify the proposal so both budget mechanisms can enter into force on 1 January 2021.
  • Today, Executive Vice-President of the Commission Margrethe Vestager presented the Solvency Support Instrument as part of the Next Generation EU recovery fund. The Solvency Support Instrument will enable equity support to businesses throughout the EU;
  • Hungarian Prime Minister Viktor Orbán commented on the European Commission’s proposal for a €750 billion recovery fund, stating that it is “absurd and perverse” and claiming that the fund would “finance the rich from the money of the poor”;
  • Economy Commissioner Paolo Gentiloni elaborated on the reinforcement of the InvestEU Program and its new Strategic Investment Facility, which will focus on investment in the fields of sustainable infrastructure, research, innovation and digitization, SMEs and social infrastructure and skills. In the framework of Next Generation EU, the Commission proposes to increase the InvestEU guarantee from €38 billion to €75 billion, increasing the mobilized investment from an estimated €650 billion to around €1 trillion;

28 May:

  • Following the publication of the Commission’s €750 billion proposal for the ‘Next Generation EU’ recovery fund, the topic has dominated the headlines of news media across Europe. Several Member States, such as France, Italy and Spain, reacted positively to the Commission’s proposal. French President Macron welcomed the Commission’s proposal and stressed the importance of quickly reaching an ambitious agreement. German Chancellor Merkel was quite neutral in her reaction and stated that Germany aims to use the presidency of the Council of the EU in the second half of 2020 to guide the negotiations for this recovery fund and a new Multiannual Financial Framework (MFF) 2021-2027.
  • Nonetheless, the upcoming negotiations are expected to be long and intense. The ‘Frugal Four’ (Austria, Denmark, the Netherlands and Sweden) welcomed the proposal, but also stressed that it represents just a starting point for the budget negotiations. Sweden already clearly expressed its disappointment over the high level of grants (€500 billion) that the Commission aims to distribute via the recovery fund. European Council President Michel announced he will discuss the proposal at the next European Council Summit on 19 June 2020, aiming to reach an agreement before the summer break. German Chancellor Merkel already stated there will be no agreement by June but that a deal should be feasible by fall of this year.
  • Commission Executive Vice-President Dombrovskis and Economy Commissioner Gentiloni today presented the Recovery and Resilience Facility, which makes up the core of the EU’s recovery fund Next Generation EU. The proposed Recovery and Resilience Facility aims to mitigate the economic consequences of the COVID-19 outbreak and has a proposed budget of €560 billion.
  • The Commission today presented its proposal for a public sector loan facility under the Just Transition Mechanism. The facility will be implemented with the involvement of the European Investment Bank and will encourage investments that support the transition towards a climate-neutral economy by public sector authorities to the benefit of coal- and carbon-intensive region. The facility will include €1.5 billion in grants from the EU budget and up to €10 billion in loans.
  • Today, Executive Vice-President Timmermans emphasized that the Next Generation EU recovery fund will focus on a green and just recovery from the COVID-19 pandemic. Timmermans said the recovery fund will trigger investments in renewable energy and storage, clean hydrogen, batteries, carbon capture and storage, and sustainable infrastructure.
  • The Commission approved a national support scheme under the Temporary Framework for state aid:
    • Finland introduced a €600 million guarantee scheme to support maritime companies affected by the COVID-19 outbreak. The public support will take the form of State guarantees on working capital loans.

27 May:

  • Today, the European Commission presented a €750 billion recovery plan, dubbed as ‘Next Generation EU’. According to Commission President von der Leyen, the plan would provide €500 billion in grants and €250 billion in loans available for countries that are hit hard by the current crisis. As such, the plan builds upon last week’s Franco-German proposal and allows the Commission to borrow on the financial markets, using the EU budget as a guarantee. Together with the new proposal for the Multiannual Financial Framework worth €1.1 trillion, the total economic firepower of the EU will be worth €1.85 trillion between 2021 and 2027.
  • All of the money raised through Next Generation EU will be channeled through EU programs in the next EU budget, with the twin green and digital transitions at its core. To partially finance this, the Commission proposes to create new revenues – “new own resources” – such as a digital tax, a carbon border tax, a corporate tax and an extension of the EU’s Emissions Trading System to the maritime and aviation sectors. This will be worked out at a later stage in the negotiations. To address the immediate needs in the crisis, the Commission proposes to amend the current MFF to make an additional €11.5 billion available in 2020.
  • The Commission aims to have the Next Generation EU and the MFF operational by 1 January 2021, and it will now be up to the Member States to reach a compromise on the EU’s economic response for the upcoming years. An important first step will be the European Council’s summit in June. The budget plan requires unanimous approval of the Member States.
  • Commission President von der Leyen presented the Next Generation EU plans to the European Parliament’s plenary and emphasized that the grants will be a clear investment in the European priorities of the digital single market, the Green Deal and resilience.
  • The Commission today also presented its adjusted Work Program 2020. The work program shows that the Commission maintains the green and digital transition as key priorities. The ‘renovation wave’, the offshore renewable energy strategy and the smart sector integration strategy remain important green initiatives in 2020. The Digital Services Act, which threatened to be delayed to next year, will still be published in the last quarter of the year.
  • President of the European Central Bank (ECB) Christine Lagarde expressed her support for more public spending as milder economic predictions would be ‘out of date’. Earlier predictions of a 7.5% economic contraction have worsened, as the ECB now predicts a contraction between 8-12%.
  • Vice-President of the European Central Bank (ECB) Luis de Guindos warned that the economic response to the COVID-19 crisis could lead to fear that countries will leave the euro as the eurozone public debt will significantly increase.

26 May:

  • The recovery from COVID-19 will require significant investments in the European economy, so how will this be financed? The discussion on the new Multi-annual Financial Framework (MFF) and Recovery Fund has already started with various coalitions of Member States tabling their respective proposals. At the same time, many Member States oppose the idea of increasing their own contributions to the MFF. As such, Commission President von der Leyen already hinted to introduce new own resources within the MFF. Own resources (e.g. via EU-wide taxation) do not require additional contributions from Member States and would directly feed into the EU budget. Especially the European Parliament is in favor of exploiting these new sources of income, also to increase its own leverage over budget decisions.
  • One of the ways to directly generate income at the EU level is through the introduction of taxes aimed at the green transition, specifically in the form of a ‘plastic tax’ or via the EU’s Emissions Trading System (ETS). Other innovative financial instruments could include a European digital tax and a corporate tax for international companies. France is set to introduce such a digital tax regardless of the status of international negotiations by the end of 2020. Commissioner Gentiloni recently emphasized a need for a global framework for digital taxation, to avoid double taxation. Alternatively, the Commission could also consider to cut spending, for example in the Common Agricultural Policy (CAP), which currently takes up about 40% of the EU budget. The Commission’s previous MFF proposal already set out a reduction of the CAP spending by almost 5% of the EU budget.
  • Top officials from Germany, France, Italy, Spain and Portugal called for more independence from foreign tech companies when it comes to the development of COVID-19-tracking technology. The Member States accuse the firms of imposing standards on the technology, who would thereby neglect the right of democratically elected governments to decide on the design of new tools;
  • The Commission approved several national support schemes under the Temporary Framework for state aid:
    • Lithuania presented a fund to enable up to €1 billion of liquidity and capital support to SMEs and large enterprises. Support will take the form of subsidized debt instruments and recapitalization instruments;
    • The Netherlands introduced a guarantee scheme to stabilize the trade credit insurance market. Trade credit insurance protects companies supplying goods and services against the risk of nonpayment by their clients;
    • Poland set up a €2.2 billion subsidized loan scheme for large enterprises. The public support will take the form of subsidized loans at favorable interest rates.

25 May:

  • In the run-up to the Commission’s proposal for a recovery fund as part of the Multi-annual Financial Framework (MFF), France and Germany tabled a joint proposal last week for a recovery fund worth €500 billion. Germany and France argue that the EU should finance a common debt of €500 billion, which will be distributed in the form of grants to the most affected regions in Europe by the Commission. In response to the Franco-German plan, the ‘Frugal Four’ (Austria, Denmark, the Netherlands and Sweden) have now presented a counterproposal.
  •  The Frugal Four’s proposal is similar to the Franco-German plan, as it calls for a common fund that raises money on the capital markets. The plan also aims to invest in research, innovation, and health, as well as the twin green and digital transitions. However, unlike France and Germany, the Frugal Four opt for the money to be distributed in the form of loans. The Frugal Four stress that the recovery fund should not lead to the mutualization of debt and that the money should be distributed within two years, instead of the three years proposed by France and Germany. The Frugal Four do not mention a specific amount for the recovery fund, as it urges for a needs assessment before this can be determined.
  • The Commission will present its own proposal for a recovery fund this Wednesday, leaving the institutions with three different initiatives to find a compromise on during the upcoming negotiations.
  • The Members of the European Economic Area held a video conference to discuss the economic response to the COVID-19 outbreak. The joint statement underlines the importance of economic cooperation and political dialogue;
  • A draft statement from the Czech government shows that the country supports an EU recovery fund in line with the priorities of the Green Deal. This is in contrast to the country’s previous position that the priorities of the Green Deal should be dropped as a consequence of the COVID-19 outbreak;
  • The Commission approved a national support scheme under the Temporary Framework for state aid:
    • Austria introduced a €8 billion scheme to compensate businesses of all sectors at least in part for the damages suffered due to the COVID-19 outbreak.

22 May: 

  • According to an internal Commission note, the COVID-19 recovery plan includes renewed focus on green energy and sustainable transport. The Commission aims to use the recovery plan to help the EU achieve its long-term climate objectives. The internal note focuses on five green priorities for recovery: greening the construction sector, increasing the uptake of renewables and hydrogen, clean mobility, the circular economy, and a resilient agricultural sector.
  • In its note, the Commission proposes, amongst others, to allocate approximately €30-50 billion over the next decade to scale up the development of clean hydrogen. For the transport sector, the Commission wants to incentivize the uptake of clean automotive vehicles, introduce a Renaissance of Rail package worth €40 billion and focus more on new urban mobility solutions through various funding instruments. To create a fully circular economy in the EU, the Commission expects significant investments in the waste management sector, increasing the uptake of high-quality secondary raw materials and digitizing the sector.
  • Over the last months, the Commission has highlighted several times that the post-COVID-19 recovery period should be in line with the EU’s twin green and digital transitions. This internal note provides a good indication of the Commission’s priorities for the new MFF proposal, which is expected to be published on 27 May.
  • The Commission approved a national support scheme under the Temporary Framework for state aid:
    • Italy set up a €9 billion umbrella-scheme to support the Italian economy in the context of the coronavirus outbreak. Under the scheme, Italian territorial bodies and chambers of commerce can provide support to companies of all sizes, including self-employed, small and medium-sized enterprises (SMEs) and large companies.

20 May:

  • The Commission today presented the European Semester Spring Package, consisting of country-specific recommendations providing economic policy guidance to all Member States in the context of the COVID-19 outbreak. The recommendations are structured around two objectives: in the short-term, mitigating the COVID-19 negative socio-economic consequences, while on the other hand achieving sustainable and inclusive growth in the short to medium-term, which facilitates the green and the digital transitions. It is now up to the Member States to adopt the country-specific recommendations and implement them. The remarks of Executive Vice-President Dombrovskis and Economy Commissioner Gentiloni upon the publication of the European Semester Spring Package are available here and here.
  • The “Frugal Four” Member States (Austria, Denmark, the Netherlands and Sweden) are reportedly working on a counter-proposal to the Franco-German proposal for a recovery fund. The bloc is opposed to a grant-based recovery fund mentioned in the original proposal, and would rather see the Commission provide support in the form of loans.
  • Italian Prime Minister Conte wrote an op-ed in which he argues that the Franco-German proposal for a €500 billion recovery fund is an important step, but more coordinated action would be needed. Conte states that the COVID-19 outbreak brings about a symmetric shock to European economies, which cannot be addressed by individual countries.

19 May:

  • Yesterday marked an important day on the EU’s road to economic recovery, as Germany and France announced a joint proposal for a €500 billion Recovery Fund. In doing so, the Franco-German initiative opens the debate about debt mutualization as an recovery instrument and its subsequent form (i.e. either in loans or grants). Germany and France argue that the EU should finance a common debt of €500 billion, which will be distributed in the form of grants to the most affected regions in Europe by the European Commission. In addition to the €500 billion Recovery Fund, Germany and France also stress the need to speed up the green and digital transitions, enhance the EU’s economic and industrial resilience in the future, and develop a comprehensive European Health Strategy.
  • The plan aims to inspire the European Commission in the run up to the new MFF proposal and recovery fund, which is expected to be presented on 27 May. European Commission President von der Leyen welcomed “the constructive proposal (…) that acknowledges the scope and the size of the economic challenge”. The German support for common debt in the form of grants can be considered a breakthrough, as Berlin has been critical about this type of debt in recent months. However, reaching an agreement will be a challenge as the EU budget requires unanimous agreement. Today, the finance ministers of Austria, Denmark and the Netherlands already voiced their opposition against a grant-based recovery fund during a videoconference of finance ministers.
  • Today, the Council officially adopted the temporary support to mitigate the unemployment risks in an emergency (SURE). SURE will provide €100 billion support in the form of loans that are backed by the EU budget and €25 billion of guarantees by the Member States. SURE will become available as soon as all Member States have provided their guarantees. Read the speech of Dombrovskis at the end of the ECOFIN Council meeting of today.
  • Apart from President von der Leyen, also the President of the European Council Charles Michel, President of the European Parliament David Sassoli and the President of the European Central Bank Christine Lagarde expressed their support for the Franco-German proposal.
  • The Commission will boost urgently needed research and innovation with additional €122 million from Horizon 2020. The new call for expressions of interest contributes to the Commission’s €1.4 billion pledge to the Coronavirus Global Response Initiative.

18 May:

  • Last Friday, significant progress was booked on the final details of the €540 billion support package for the European economy. The ESM Board of Governors formally confirmed the €240 billion ESM support. In addition, EU ambassadors reached a political agreement on the EU’s short-time work scheme (SURE) worth €100 billion. The SURE instrument will enable Member States to request EU financial support to help finance the sudden and severe increases of national public expenditure. Economy Commissioner Gentiloni indicated that the final part of the support package, the EIB European Guarantee Fund, still needs some progress in order to become operational. This last part of the puzzle will trigger up to €200 billion of investments to stimulate the economic recovery in the EU.
  • The complete support package of €540 billion will have to be operational on 1 June, but the €240 billion ESM-support is operational and available to Member States as of today, providing favorable financing of 2% of each Eurozone Member State’s GDP without macroeconomic conditions attached. With the first economic measures ready for roll out, the Commission is working on the new proposal for the Multiannual Financial Framework 2021-2027 and a Recovery Fund, which is expected to be published on 27 May, delayed from the original date of publication of 20 May.
  • Commission President von der Leyen gave an interview to Financial Times on the EU’s efforts to develop a plan for a COVID-19 recovery fund;
  • Competition Commissioner Margrethe Vestager expressed concern about the huge differences in the amount of COVID-19-related state aid between Member States, warning these discrepancies are starting to distort the EU Single Market. Vestager warned that this distortion of competition could hamper the economic recovery from the COVID-19 crisis;
  • The leader of the European People’ Party in the European Parliament, Manfred Weber, said he wants to temporarily ban Chinese takeovers. This way he wants to address the threat that Chinese companies acquire European companies that are currently undervalued as a consequence of the COVID-19 crisis;
  • The Commission approved several national support schemes under the Temporary Framework for state aid:
    • Czech Republic set up a €18.5 billion guarantee scheme for companies with up to 500 employees;
    • Denmark introduced a guarantee scheme supporting the insurance of trade between companies affected by the COVID-19 outbreak. Trade credit insurance protects companies supplying goods and services against the risk of non-payment by their clients.

15 May:

  • This week was centered around the publication of the Tourism and Transport package of the Commission on Wednesday. The Commission offered guidance on safely resuming travel and rebooting Europe’s tourism sector in 2020. Since these Commission guidelines are non-binding, and Member States can decide unilaterally on border controls and restrictions, it will now be up to the Member States to decide on the next steps out of the lockdowns and towards economic revival.
  •  Next week will be focused around some long-expected legislative initiatives. The Commission is expected to present the EU’s Farm to Fork strategy and Biodiversity strategy on Wednesday, as well as the European Semester Spring Package, which includes country-specific recommendations and economic policy guidance. The European Parliament and the Council of the EU will continue their institutional work to the best of their abilities via several remote meetings. On Monday, the parliamentary Internal Market (IMCO) Committee will discuss the European Recovery Fund and relaxation of lockdown measures with Commissioner Breton. On Tuesday, the Industry (ITRE) Committee will exchange views with Commissioner Simson on energy-related aspects of European recovery after COVID-19.
  • The Council of the EU has reached political agreement on the temporary support to mitigate unemployment risks in an emergency (SURE). The file will have to be formally adopted by the Council by written procedure, which is foreseen to happen by 19 May.
  • The European Parliament has adopted a resolution on the economic recovery plans of the EU. The EP insists that the new “recovery and transformation fund” must be €2 trillion in size, financed “through the issuance of long-dated recovery bonds” and “disbursed through loans, and mostly, through grants, direct payments for investment and equity”. The resolution was adopted today by plenary with 505 votes in favor, 119 against and 69 abstentions.

14 May:

  • Yesterday, Commission president von der Leyen delivered a speech during the European Parliament’s plenary session on the financial aspects of the COVID-19 recovery package. The recovery package will consist of two parts. Firstly, a revised MFF proposal, which is expected to now be published on 20 May – although not a hard date. Secondly, and on top of the MFF, a Recovery Instrument, which will be funded through additional resources that the Commission can borrow from capital markets thanks to guarantees from Member States. This recovery instrument will include grants and has short-term objectives, as it focuses on the first years of recovery.
  • Funds from the Recovery Instrument will be used across three pillars where there is the greatest need and greatest potential. The bulk of the money will be spent in the first pillar, the short-term recovery and reconstruction of the EU economies that are hit hardest by the pandemic. The second pillar focuses on kick-starting the economy by boosting private investment in the green and digital transitions, through a reinforced InvestEU and the establishment of a new ‘Strategic Investment Facility’. The third pillar aims to strengthen the EU health care sector through existing funding programs and the establishment of a new, dedicated Health Program.
  • The European Center for Disease Control and Prevention (ECDC) and the European Union Aviation Safety Agency (EASA) sent out draft safety guidelines to Member States on 13 May, aimed at allowing air travel resumption while keeping the risk of COVID-19 transmission low.

13 May:

  • Today, the European Commission presented a package of guidelines and recommendations to advise  Member States on gradually lifting travel restrictions and allow tourism businesses to reopen, after months of lockdown, while respecting necessary health precautions. Today’s package aims to set a framework to make sure the tourism season can in part go ahead, while preventing a potential resurgence of the number of COVID-19 cases in the EU.
  • The Commission’s Tourism and Transport package consists of several documents, including:
    • A common approach to restoring free movement and lifting restrictions at EU internal borders in a gradual and coordinated way. The guidance document builds on the existing Roadmap of 15 April, complementing it with a phased approach that should offer the EU flexibility to move to a next phase in case of an improved epidemiological situation and to move back to a previous phase in case the epidemiological situation deteriorates;
    • A framework to support the gradual re-establishment of transport whilst ensuring the safety of passenger and personnel. The framework provides general recommendations but also makes specific recommendations for the different modes of transport;
    • A recommendation which aims to make travel vouchers an attractive alternative to cash reimbursements for consumers;
    • Criteria for restoring tourism activities safely and for developing health protocols for hospitality establishments.
  • These Commission guidelines are non-binding, as Member States can decide unilaterally on border controls and restrictions. However, the Commission aims to coordinate their efforts to achieve the freedom of movement as much as possible by facilitating cross-border coordination. 
  • The Commission published a common approach for safe and efficient mobile tracing apps across the EU. These guidelines build on the previous guidelines of the EU, but complement in the sense that they focus on the interoperability of the apps across the EU, also in view of the expected gradual re-establishment of the freedom of movement in the EU.
  • The Commission has published its updated College agenda for the period 20 May to 29 July 2020;
  • The European Parliament published its new parliamentary agenda for the rest of the year;
  • The Commission approved several national support schemes under the Temporary Framework for state aid:
    • Belgium set up a €25 million scheme to support R&D activities in Wallonia needed for finding solutions to address the health crisis;
    • Croatia introduced a €322 million loan guarantees and subsidized loans scheme for micro-, small- and medium-sized companies;
    • Latvia presented a €1.5 million scheme to support companies active in the agricultural sector. The scheme will enable the provision of zero-interest loans of up to €100,000 to companies;
    • Malta set up a €11.5 million support scheme to support investments in the production of products that are relevant to the COVID-19 outbreak, including vaccines, ventilators and personal protective equipment.

12 May:

  • Following the European Council meeting of 26 March, the Commission started the work on drafting a comprehensive recovery plan from the COVID-19 crisis. This will be presented to the EU leaders to discuss at a later stage.
  • The Commission invites Member States and other stakeholders to comment on the updated proposal on simplified rules for state aid combined with EU support. The proposal aims to exempt aid granted through national funds for projects supported under certain EU centrally managed programs from Commission scrutiny under EU state aid rules;
  • The Commission announced that eight large-scale research projects, aimed at developing treatments and diagnostics for COVID-19, have been selected in a fast-track call for proposals. The Commission mobilizes a total of €117 million in investments for these projects;
  • The COVID-19 crisis “proves the need for an international rules-based order,” the EU’s Commissioner for International Partnerships Jutta Urpilainen said in an interview with Euractiv;
  • The EU is backing calls for a timely review of the international response to the COVID-19  pandemic, including the World Health Organization’s performance, according to the draft of a resolution for ministers to debate at the WHO;
  • The Commission approved several national support schemes under the Temporary Framework for state aid:
    • Greece set up a €500 million scheme to support self-employed and small family-owned businesses in maintaining activity during the COVID-19 crisis. The scheme provides a one-off payment of €800 per self-employed person;
    • Poland presented a €450 million scheme to support the Polish economy. The scheme is co-financed by the EU structural funds. The support comes in the form loans and state guarantees on loans;
    • The United Kingdom introduced a €10.3 billion aid scheme to support self-employed individuals and members of partnerships.

11 May:

  • Last Friday, the Eurogroup convened to further discuss the eurozone’s economic response to the COVID-19 crisis. Following the meeting, President Mário Centeno announced that the finance ministers agreed on the final details of the European Stability Mechanism (ESM) pandemic program. The ministers agreed that all the Eurozone Member States meet the eligibility criteria to access the safety net. Furthermore, due the nature of the crisis, the monitoring strictness will be far from what it would be like in a sovereign debt crisis. Moreover, the loans will have an average maturity of ten years and will carry a low financing cost.
  • The complete support package of €540 billion will have to be operational on 1 June, but €240 billion ESM-support must become operational as of 15 May already, when the ESM Board of Governors is expected to formally confirm the agreement of the Eurogroup.  An additional €200 billion is mobilized by the European Investment Bank and the Commission’s short-time work scheme (SURE) ensures a contribution of €100 billion to the support package.
  • This Wednesday, the Commission is expected to publish a further Communication on the reinstatement of connectivity and tourism in Europe, as well as a renewed proposal for the Multiannual Financial Framework (MFF) 2021-2027, which is more focused on the long-term recovery of the EU’s economy in the aftermath of the COVID-19 crisis. Furthermore, from Wednesday to Friday, the European Parliament will convene for another extraordinary plenary session to discuss, amongst others, the outlook for the next MFF.
  • On 8 May, the Commission adopted a second amendment to the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak. The Commission consulted Member States some time ago but has now officially adopted the amendment. This amendment includes recapitalization measures into the framework and allows governments, as a last resort measure, to provide national public support in the form of equity and/or hybrid capital instruments to undertakings facing financial difficulties. The Temporary Framework will keep applying until the end of 2020, but the recapitalization part of the framework will be extended until the end of June 2021 as solvency issues may materialize only at a later stage as the crisis evolves;
  • The Presidents of the three main institutions of the EU published a joint op-ed in which they argue for a Europe that emerges stronger from the crisis. They look back at the actions taken already to ensure a swift response the crisis and recognize more action should be taken to ensure that the recovery is built on the European Green Deal;
  • The Commission approved several national support schemes under the Temporary Framework for state aid:
    • France set up a guarantee scheme for exporting small and midsize companies. The scheme will mobilize €200 million;
    • The Netherlands introduced a €650 million support scheme for the floriculture, specialty horticulture and potato sectors for damage caused by COVID-19 crisis.

8 May:

  • This afternoon, the Eurogroup will convene to further discuss the economic response to the COVID-19 outbreak. Ahead of this meeting, Executive Vice President Valdis Dombrovskis sent a letter to the president of the Eurogroup, Mário Centeno. Without mentioning any specific Member State, the Commission is attempting to convince Italy to accept credit lines from the European Stability Mechanism (ESM) by limiting the strict rules applied to the use of ESM-loans. The Commission announced they will only require that all funds be spent on direct and indirect health costs. The Eurozone finance ministers are invited by the Commission to endorse this proposal during today’s meeting.
  •  Looking ahead to next week, The Commission is expected to present on Wednesday a broad package of recommendations aimed at the reinstatement of connectivity and tourism in the EU. From the Parliament’s perspective, an extraordinary plenary session will take place from Wednesday to Friday. The main focus will be the upcoming MFF proposal and the recovery fund. Apart from the plenary session, there will be several parliamentary committee meetings next week. On Monday, the Committee for Transport and Tourism (TRAN) will discuss the legislative proposals the Commission published to provide flexibility to the transport sector, and will discuss the future of the transport sector with Commissioner Timmermans. Furthermore, the Committee for Environment, Public Health and Food Safety (ENVI) will discuss sustainable mobility with Transport Commissioner Vălean on Monday, and discuss the Circular Economy Action Plan and the Biodiversity Strategy with Environment Commissioner Sinkevičius on Tuesday.
  • The Commission will deliver the first batch of 1.5 million mask from the 10 million masks purchased to support EU healthcare workers. The masks have been purchased via the Emergency Support Instrument and will delivered to seventeen Member States;
  • The Commission approved another national support scheme under the Temporary Framework for state aid:
    • Croatia provides €40 million loan guarantee to mechanical engineering company Ðuro Ðaković.

7 May:

  • The Commission is currently finalizing a new proposal on the Multiannual Financial Framework (MFF) 2021-2027, which will be focused on economic recovery of the European economy. Recent discussions in the Eurogroup and the European Council on short-term economic support have already exposed the diverging positions of Member States on how the recovery phase should be financed. This week, five Member States (Austria, Finland, Germany, the Netherlands and Sweden) have issued criticism on the expected form of the recovery fund as part of the MFF.
  • The Commission plans on collectively borrowing money from the market and striking a right balance between loans, grants and financial guarantees. However, the above-mentioned Member States are fiercely opposed to debt financing grants and would be only willing to agree on a ‘borrow-to-lend approach’. Member States such as Italy and Spain argue that loans will add on their debts and thereby harm long-term economic prospects. In addition, EU leaders have to take into account the position of another institution: the European Parliament.
  • In the run-up to the revised MFF proposal, the Parliament wants to play a bigger role. Manfred Weber, leader of the biggest political group in the European Parliament, the European People’s Party (EPP), sent a letter on behalf of the EPP to Commission President von der Leyen and European Council President Michel, stressing that the EPP wants its position to be heard with regards to the new MFF. The EPP argues that the European Parliament, the only directly elected body of the EU, cannot be sidelined on such an important issue. The EPP’s support would be crucial for the Parliament’s approval of the future MFF, as the Christian democrats currently occupy 187 out the 705 seats. To be continued!
  • The Commission approved several national support schemes under the Temporary Framework for state aid:
    • Czech Republic set up a €7.3 million scheme to support research and development of product relevant for the fight against COVID-19;
    • Finland introduced a €40 million direct grant scheme to support companies in the agriculture and fishery sectors. The scheme will cover part of operating expenses, such as salaries and rent;
    • Hungary presented a €314 million guarantee scheme to support SMEs in all sectors, but aimed at the wider agri-food value chain.

6 May:

  • As many Member States are already gradually loosening lockdown measures, the Commission is expected to publish a follow-up to its ‘European roadmap towards lifting coronavirus containment measures on 13 May. This will entail a broad package of recommendations aimed at the reinstatement of connectivity and tourism in the EU. The package will, amongst others, include a Communication on Tourism, protocols on health and safety for main tourism locations, guidance on safe and healthy resumption of passenger transport and guidance on lifting of international borders.
  • Moreover, the package is expected to include an assessment of the application of the temporary restriction on non-essential travel to the EU. In recent weeks, DG MOVE reached out to industry stakeholders to discuss possible solutions to restore connectivity across Europe. Even though Member States asserted their competence to decide on border management measures, the Commission aims to coordinate and streamline border measures as much as possible. The cabinet of President von der Leyen is currently finalizing the text for publication.
  • The Eurozone will be hit hard by economic effects of the COVID-19 crisis. The Spring 2020 Economic Forecast projects that the euro area will contract by 7,75% in 2020 and grow by 6,25% in 2021. For the EU economy as a whole, the expectations are respectively 7,5% contraction in 2020 and 6% growth in 2021. At this point, the Commission foresees a deep and uneven recession with uncertainty about recovery. The drop in economic output and the rebound expected for 2021 are anticipated to differ significantly between Member States. Considering the interdependence of European economies, Commissioners call for a joint economic response. Read the remarks of the Commissioner for Economy, Paolo Gentiloni, here;
  • Commissioner for Jobs and Social Rights, Nicolas Schmit, delivered a speech after an informal video conference with employment and social affairs ministers. Schmit expressed his support for the introduction of many national short-time work schemes. Furthermore, Schmit states that he expects that the European short-time work scheme, SURE, can commence as of 1 June. The SURE instrument can support Member States to a total maximum of €100 billion;
  • The Commission approved another national support scheme under the Temporary Framework for state aid:
    • Greece introduced a 10 million scheme to support companies in the floriculture sector affected by the COVID-19 pandemic.

5 May:

  • Since the outbreak of the COVID-19 virus across Europe, the Commission approved almost one hundred national support schemes under the temporary framework for state aid, worth more than €1.9 trillion. Commission data shows that Germany has so far been granted 52% of the total value of state aid under the temporary framework, which has raised doubts about the effectiveness of competition policy when state aid rules are loosened. Germany has more financial resources than many other Member States to provide state aid support to companies in need. Some Spanish officials already expressed their fear that the relaxation of state aid rules and approving of national support schemes in these times can result in the breakdown of the internal market.
  • Competition Commissioner Vestager has reacted to these concerns by stating that the differences in fiscal space to provide state aid have always existed. She emphasized that a strong recovery for Germany could serve as a “locomotive” for the EU. Vestager added that this unequal access to liquidity between Member States is a valid argument for a strong European recovery plan within the Multiannual Financial Framework (MFF) 2021-2027, as the MFF is a familiar architecture when it comes to redistribution and creating a level playing field. The Commission is expected to publish a revised proposal for the MFF in the course of next week.
  • The Coronavirus Global Response, the pledging initiative set up by the European Commission, raised €7.4 billion for vaccines, diagnostics and treatments, almost reaching the initial target of €7.5 billion. Involved actors included the EU, Canada, France, Germany, Italy, Japan, Saudi Arabia, Norway, Spain and the United Kingdom. These actors aim to accelerate the development, production and equitable global access to new essential health technologies. The EU itself contributes €1 billion from its budget;
  • The Commission approved several national support schemes under the Temporary Framework for state aid:
    • Belgian’s Flemish region set up a €250 million scheme to support start-ups, scale-ups and SMEs. Loans will not exceed €800.000 per company and will be provided until the end of the year;
    • Czech Republic presented a €5.2 billion guarantee scheme for loans to large exporting companies;
    • Denmark set up two loan schemes worth €296 million to support start-ups affected by the COVID-19 outbreak;
    • Italy introduced a €30 million support scheme for SMEs in the agriculture and fishery sectors. The scheme will provide zero-interest loans enabling companies to cover their immediate working capital needs.

4 May:

  • This afternoon, the Commission will launch the Coronavirus Global Response International pledging event. This marks the start of an online pledging event during which countries, international organizations and private companies are asked to financially contribute in an effort to raise an initial amount of €7.5 billion funding for the purpose of developing diagnostics, therapeutics and vaccines against COVID-19. Last Sunday, several EU leaders including Macron and Merkel, as well as Commission President von der Leyen and Council President Michel, published an co-authored op-ed, in which they explained how the pledging event will contribute to universal access to vaccination, treatment and testing.
  • In other news, several Member States have started to gradually release lockdown measures and open specific sectors of the economy. The Commission is expected to present a strategy on the recovery of transport services and connectivity on 13 May. This strategy is expected to include an overview of measures how to gradually scale-up intra-EU travel while ensuring the safety of passengers and personnel, for example by the use of personal protective materials and/or imposing social distancing and sanitary measures. As for extra-EU travel, the Commission is expected to extend its current advice to Member States to forbid non-essential travel with at least one month from 15 May onwards.
  • Several batches of FFP2 protective masks have been distributed to Spain, Italy and Croatia from rescEU, the first ever common European reserve of medical equipment set up last month to help countries affected by the COVID-19 pandemic;
  • This afternoon, the European Parliament’s Budget Committee votes on a draft report with recommendations for the European Commission on setting up a contingency plan for the Multiannual Financial Framework (MFF) 2021-2027;
  • The Commission approved several national support schemes under the Temporary Framework for state aid:
    • Belgium set up a €530 million support scheme for the Walloon economy. The guarantees aim at limiting the risk associated with issuing or restructuring loans to affected companies;
    • Denmark announced a €130 million support scheme for SMEs active in almost all sectors. The scheme takes the form of tax deferrals and similar measures in relation to VAT and payroll tax liabilities;
    • France will provide €7 billion in liquidity support to airline Air France. The state support will take the form of a state guarantee on loans and a subordinated shareholder loan to the company;
    • Lithuania introduced a €101.5 million rent compensation scheme to support sectors affected by the COVID-19 outbreak. The scheme takes the form of direct grants and helps cover a part of the rental costs of companies including retail, hotels, restaurants, culture and sports whose annual turnover in the previous year not exceed €50 million;
    • Slovenia has set up a €2 billion guarantee and rent relief scheme. €500.000 will be provided in the form of rent rebated and rent exemptions and €2 billion in the form of public guarantees on investment and working capital loans.

30 April:

  • Yesterday, EU Transport ministers held their second informal videoconference to discuss future work on the exit and recovery strategies. The ministers expressed their support for the relief package that was presented by Transport Commissioner Vălean. The ministers reflected on the positive impact of the Green Lanes on maintaining the supply chains, made possible by the network of National Contact Points and on the necessity to stay vigilant in view of the expected growth of traffic in the coming period. The ministers agreed on the need of an EU coordinated approach towards reinstating connectivity and mobility. A summary of the meeting by the Croatian Presidency elaborates on the main take-aways per transport mode.
  • As tomorrow is International Workers’ Day, we will already look ahead to the EU’s agenda for next week. On Monday 4 May, the Internal Market Committee (IMCO) will exchange views with Commissioner Vestager about the impact of the COVID-19 crisis on the digital policy area and the Commission’s work program. On Friday 8 May. Eurozone Finance ministers are expected to discuss the crisis situation in the Eurozone during the Eurogroup videoconference. Furthermore, several activities next week will be centered around the Coronavirus Global Response Pledging Event, which will be launched on Monday by Commission president von der Leyen and is aimed at raising €7.5 billion for COVID-19 related R&D.
  • The European Central Bank (ECB) today took some new monetary policy decisions to further support the European economy. ECB-president Lagarde announced the EU’s GDP contracted by 3.8% in the first quarter and could fall between 5% and 12% this year, depending on the duration of the containment measures. As a response, the ECB reduced the interest rate for long-term refinancing operations during the period June 2020 to June 2021. The interest rate on main refinancing operations remain the same, but conditions for banks are eased. Lagarde also stated the ECB is ready to increase the Pandemic Emergency Purchase Program if needed;
  • Several Member States have expressed criticism towards the Commission’s plan to propose a recovery plan including loans raised on financial markets, using guarantees that would be provided by Member States and thereby raising the ceiling on how much they contribute to the multiannual financial framework (MFF). The proposal for the new MFF still needs to be published, but it is already criticized by Austria, Finland, Germany, the Netherlands and Sweden;
  • European Commissioner for Economy, Paolo Gentiloni, reiterated that the EU recovery fund to weather the economic damage caused by the COVID-19 crisis should total around €1.5 trillion. Gentiloni added that the recovery fund should start in the second half of 2020 instead of December 2020;
  • The Commission approved another national support scheme under the Temporary Framework for state aid:
    • Greece modified a previously approved guarantee scheme to support companies affected by the COVID-19 outbreak, extending its scope and increasing its budget to €2.25 billion.

29 April:

  • As EU leaders struggle to agree on the details of a ‘Marshall Plan’-like recovery fund, the European Central Bank (ECB) appears to be the main crisis manager so far to help out Eurozone countries in need. On 18 March, the ECB announced a €750 billion Pandemic Emergency Purchase Program (PEPP). The ECB is currently using the PEPP to purchase both government and corporate bonds in order to reassure the financial markets in times of crisis. However, according to market analysts, the PEPP could run out of resources already before October 2020. This means the ECB might need to top up the emergency scheme.
  • The ECB will convene on Thursday to take stock of all the current measures but also to get a better grip on the severity of the economic situation. ECB President Lagarde already warned EU leaders last week that the Eurozone economy could shrink by 15% this year. Does that mean the ECB is willing to do ‘whatever it takes’? A potential scenario that ECB members are likely to discuss on Thursday, is whether to already increase the PEPP’s budget by €250 to €500 billion. It is expected to be a matter of time before the PEPP’s firepower will be increased.
  • The Commission approved several national support schemes under the Temporary Framework for state aid:
    • Estonia presented two additional financial schemes to support companies. The first scheme is open to companies in all sectors and support will be provided in the form of public guarantees, loans and subsidized interest rates for loans. The second scheme will provide liquidity through public guarantees and loans to companies active in agriculture, fishery and food processing sectors;
    • France provided Renault Group with a loan guarantee of €5 billion to help the company obtain the urgently needed liquidity due to the impact of the COVID-19 pandemic;
    • Germany set up an umbrella-scheme supporting R&D, investments into testing and upscaling infrastructures for medicinal products and investments into production facilities for medicinal products;
    • Hungary introduced a €1.55 billion scheme enabling the country to provide public guarantees on loans to companies. Hungary also introduced three aid measures amounting to €900 million consisting of direct grants, guarantees on loans and subsidized interest rates for loans.

28 April:

  • The European Commission today adopted a banking package to help facilitate bank lending to households and businesses throughout the EU. The package aims to ensure banks can continue to lend money to support the economy and help mitigate the impact of the COVID-19 outbreak. The package includes an Interpretative Communication, recalling that EU rules allow banks and their supervisors to act in flexible but responsible manner to support citizens and firms. The package also includes an amending regulation implementing targeted changes to maximize the capacity of credit institutions to lend and absorb losses related to the pandemic;
  • Commissioner for Energy Kadri Simson delivered a speech following the High-Level Videoconference of Energy Ministers. She emphasized that the European energy market proved to be resilient in a time of crisis and expressed her support for the central role the European Green Deal will play in the EU’s recovery plan. She emphasized three focus areas for the energy sector during the recovery: boosting buildings renovation, accelerating renewables development and investing in innovative clean energy technologies;
  • The Croatian presidency stated that the majority of the Energy Ministers supported to proceed with the Green Deal initiatives such as the sector integration strategy, the offshore wind strategy and the ‘renovation wave’;
  • The European Commission approved another national support scheme under the Temporary Framework for state aid:
    • Poland set up €16.6 billion repayable advance scheme to support micro and small and medium-sized companies to address their immediate liquidity needs.

27 April: 

  • The activities of the current presidency of the Council of the EU, Croatia, have been hit hard by the COVID-19 outbreak. Working procedures have been heavily constrained and meetings now need to take place virtually – often facing technical difficulties. As such, this has led to a slowdown of the legislative procedure and cutback in Council activities of almost 75%. Moreover, Croatia had to postpone or cancel many of the conferences and ministerial meetings planned in Croatia – including flagship events like the EU-Western Balkans summit and the TEN-T Days. It is expected that the constrained working methods and social distancing rules will continue into the German presidency. Germany will assume the presidency chair on 1 July from Croatia, but has to take a completely different route in order to be effective.
  • The focus of the German presidency – already dubbed as the ‘corona presidency’ – will be on crisis management and the economic revitalization of the EU. German Chancellor Merkel already stated that the German presidency “will take a different course than we had planned” in the second half of 2020. Merkel also stated the climate and environmental issues will be central in the recovery plans. This seems to be in response to criticism Germany received due to its alleged failure to formulate concrete goals for the Green Deal. In addition, the German presidency will be creating an efficient European health system, possibly by putting a financial transaction tax and “minimum taxes” in EU countries on the agenda.
  • The Commission received its first preliminary application for support from the EU Solidarity Fund for a health emergency from Italy. As of 1 April 2020, the scope of the fund was extended to also cover health emergencies. The Commission will wait for all applications until 24 June 2020, and will then assess them in a package in order to ensure an equitable treatment of all cases;
  • Commissioner for Economy Paolo Gentiloni stated that the EU needs to have a recovery fund worth €1.5 trillion available by mid-September. He added that the EU cannot afford to wait for several years to have a recovery fund ready;
  • The Commission launched a pledging effort – the Coronavirus Global Response – starting on 4 May. The worldwide pledging marathon should help reach the target of €7.5 billion in initial funding for the development of fast and equal access to safe, quality, effective and affordable diagnostics, therapeutics and vaccines against COVID-19;
  • The European Commission approved several national support schemes under the Temporary Framework for state aid:
    • Belgium set up a €4 million direct grant scheme to support COVID-19 related R&D in the Brussels-Capital region. Belgium also introduced a €200.000 scheme for all companies active in the primary agricultural and aquaculture sector in Brussels-Capital region;
    • Finland introduced a €3 billion scheme to support companies suffering from the COVID-19 crisis. The support can amount up to €800.000 per company and takes the form of direct grants, equity injections, tax and payment advances and state guarantees;
    • France set up a €150 million scheme to support SMEs with export activities;
    • Germany grants a €550 million state-guaranteed loan to compensate airline Condor for the damage caused by the COVID-19 outbreak;
    • Lithuania presented a €5 million direct grant scheme to support the Lithuanian SMEs in the road freight transport sector;
    • Malta set up a €215 million employment aid scheme. The scheme is accessible for all companies and self-employed people;
    • The Netherlands instated a €100 million subsidized loan scheme to support SMEs whose main source of financing derives from external equity, venture capital or microcredit;
    • Poland established a €700 million scheme to support companies in all sectors through grants and repayable advances using EU structural funds;
    • Slovenia has introduced a €2 billion umbrella-scheme to support the whole economy. Aid is provided in the form of wage subsidies, tax exemptions and reductions, guarantees and deferred payment of loans;
    • Spain set up a second umbrella-scheme to support the economy. The maximum amount of support depends on the sector of a company;
    • Sweden provided airline SAS with a state guarantee of up to €137 million to compensate the airline for the damage caused by the COVID-19 outbreak.

24 April:

  • Yesterday, the European Council held its fourth videoconference since restrictive measures for Council meetings were imposed. As expected, the European leaders  endorsed  the economic aid package, including three safety nets, worth €540 billion. The package should be operational by 1 June 2020. Furthermore, first steps were taken towards the establishment of a recovery fund. The Commission has been  tasked  with analyzing the exact needs and to come up with a proposal, therein also clarifying the link with the multi-annual financial framework (MFF) 2021-2027. After the videoconference, Commission President Von der Leyen  specified  that the Commission  will propose a new MFF proposal on 6 May.
  • What can we expect from the ‘new’ MFF? According to a  leaked note  from the Commission, the new proposal should be able to trigger  at least €2 trillion of new investments. Von der Leyen  stated  that this can be financed by increasing the own resources system temporarily (2-3 years) to  2% of Member States’ GNI, instead of the 1.2% in the 2014-2020 MFF. This would help to establish a   temporary Recovery and Resilience Facility  of €300 billion in the MFF. This would consist of a budget of €200 billion to fund Member States’ recovery plans, and frontloading €50 billion of Cohesion Policy in 2021 and 2022 to restoring labor markets, health care systems and SMEs, triggering up to €150 billion in expenditure in the two years.
  • One of the main topics still up for debate in the European Council is the  design of the payments from the recovery fund. The Netherlands and Germany   believe  the money from the fund should be granted in the form of  loans, whereas Member States such as Italy and France are in favor of  grants  financed by some form of shared debt. As a compromise, the Commission  could propose  an instrument that finances half of the amount through loans and the other half linked to the EU budget to be repaid in the long term.
  • The European Commission published a  report  on the impact of COVID-19 on EU trade flows, looking at both EU exports and imports;
  • The European Commission approved  several national support schemes  under the Temporary Framework for state aid:
    • Bulgaria  introduced  a €150 million scheme to support SMEs affected by the COVID-19 outbreak. The scheme takes the form of equity and quasi-equity investments of up to €800.000 per company.

23 April:

  • Across Europe, Member States are exploring how mobile applications can contribute to contain and reverse the spread of the COVID-19 crisis. One of the prime conditions for such applications to become operational is to be compliant with the EU’s GDPR rules. The Commission issued a press release on 16 April on contact tracing apps, and presented a toolbox for Member States as a serving guide to ensure data protection. In here, the Commission recommends, amongst others, that apps should not use location data in their contact tracing apps and store data in an encrypted way. The Commission called on Member States to report on their national digital tracking efforts to the Commission by 31 May. Based on this input they will further develop the aforementioned toolbox and guidance document.
  • Meanwhile, Apple and Google already announced to contribute to the development of apps. The tech giants have developed software technology that allows personal devices new ways to swap data. Phone users would have to voluntarily enlist in this program by downloading an app from their local health care authority. Through Bluetooth, smartphones can track nearby contacts with other users. On Monday, over 300 scientists from 25 countries signed a letter that argues that decentralized app designs should be preferred as they are more suitable in preserving privacy than centralized models.
  • Commissioner for values and transparency, Vĕra Jourová, highlighted the length of data storage periods as a critical point, stating: “we need time limitations for the storage of the data for only what is necessary.” Commission Executive Vice President Vestager told Euractiv in an interview on 17 April that there should not be a choice between fighting the virus and protecting privacy, but the two should be compatible. She added that “you don’t find big European companies” in certain sectors of the digital economy to develop these apps, which is very important to consider in the EU’s digital agenda (which aims to facilitate the rise of European digital champions to compete with the likes of Google and Facebook).
  • The European Commission approved several national support schemes under the Temporary Framework for state aid:
    • Malta introduced a €5.3 million direct grants scheme to support investment in research and development related to the coronavirus outbreak. The aim of the scheme is to support the development of innovative solutions to the current coronavirus health crisis;
    • Poland announced eleven State aid schemes with a total budget of €7.8 billion. The support will take the form of direct grants, repayable advances, tax and payments advantages, deferrals of tax payments and wage subsidies for all company sizes.

22 April:

  • Tomorrow, the European Council will convene to discuss the EU’s recovery on the medium to long term. In preparation, European Council President Michel published a ‘Roadmap for recovery’ in which the main principles of a comprehensive recovery plan are set out, including solidarity, flexibility, inclusiveness and the upholding of fundamental rights such as the rule of law.
  • What will be discussed concretely tomorrow? First of all, EU leaders are expected to endorse the economic support package of €540 billion, which was already agreed by the Eurogroup two weeks ago. Second, the EU leaders are expected to debate the EU’s long-term recovery and modernization plans through the establishment of an economic Recovery Fund. Discussions are expected to focus on the contributions of Member States to a potential Recovery Fund and how this fund is connected to the multi-annual financial framework (MFF) for 2021-2027.
  • One option to feed the Recovery Fund would be through the issuing of ‘EU bonds’, not to be confused with ‘coronabonds’. In contrast to coronabonds, EU bonds do not lead to mutualization of debts as the bonds are financed by the EU budget and are only of a temporary nature. Earlier this week, German Chancellor Merkel supported the idea of temporary EU bonds backed by the MFF, and recognized this would require an increased EU budget (i.e. higher Member States’ contributions). The position of Germany could mean a potential breakthrough for the seemingly irreconcilable differences between Northern and Southern Member States about how to finance the EU’s economic recovery.
  • The European Commission approved several national support schemes under the Temporary Framework for state aid:
    • Ireland introduced a €200 million scheme to support companies operating in the manufacturing and in the internationally traded services sectors. The scheme will take the form of grants, repayable advances, equity injections and subsidized loans;
    • Italy set up another €50 million subsidized loans scheme to support agriculture, forestry and fishery sectors in the Fiuli Venezia Giulia region;
    • The Netherlands introduced a €10 billion support scheme to cover companies’ immediate working capital and investment needs;
    • Poland introduced an aid scheme of €110 million to support the economy in the context of COVID-19. The scheme takes the form of direct grants and state guarantees for loans;
    • Sweden announced a €38 million scheme to compensate damages caused due to the cancellation or postponement of cultural events.

21 April:

  • Executive Vice President of the Commission Margrethe Vestager has stated that support schemes of Member States can be extended if necessary. However, she reiterated that taxpayers’ role in providing firms with liquidity must be of a temporary nature;
  • The European Commission launched a European COVID-19 Data Platform to enable the rapid collection and sharing of available research data. The platform is part of the ERAvsCorona Action Plan and is an effort to support researchers in Europe and around the world in the fight against the COVID-19 outbreak;
  • The European Commission approved several national support schemes under the Temporary Framework for state aid:
    • Estonia introduced a €75.5 million scheme in the form of direct grants and payment advantages to support companies affected by the COVID-19 outbreak;
    • Finland set up a €2 billion aid scheme granting loans at favorable terms and providing public guarantees on loans companies affected by the COVID-19 pandemic;
    • Italy introduced a €100 million scheme to support SMEs in agricultural, forestry, fishery and aquaculture sectors in the context of the COVID-19 crisis;
    • Slovakia introduced a €2 billion aid scheme for preserving employment and supporting self-employed. The scheme covers part of the wage costs of undertakings that would otherwise have laid off personnel.

20 April:

  • Last Friday, the European Parliament (EP) adopted a joint resolution on the EU’s long-term economic recovery from COVID-19, calling for an extensive recovery- and reconstruction package besides the already agreed fiscal and liquidity measures, to be financed by an increased overall budget for the multiannual financial framework (MFF). The resolution of the EP is expected to put additional pressure on EU leaders to find agreement on an ambitious economic aid package during next Thursday’s European Council meeting.
  • The EP also calls for “recovery bonds” guaranteed by the MFF, which will not lead to the mutualization of existing debts but are rather focused on future investments. In addition, the EP opts for the establishment of a permanent European Unemployment Scheme (on top of the temporary scheme) and an EU Coronavirus Solidary Fund of at least €50 billion. Furthermore, the EP stresses that the European Green Deal and the digital transformation should be at the core of a recovery plan in order to kick-start the economy.
  • In addition to the resolution, Members of the European Parliament approved, with an overwhelming majority, the Commission’s proposals for a Coronavirus Response Investment Initiative Plus (CRII+), the Emergency Support Instrument, increased rescEU medical capacity and the postponement of the Medical Devices Regulation. Only the CRII+ Initiative and the postponement of the Medical Devices Regulation still require approval by the Council of the EU before coming into effect.
  • European Commissioner for the Economy, Paolo Gentiloni, argued that an additional €1 trillion in funds is needed to compensate the economic fallout due to COVID-19;
  • The European Commission approved several national support schemes under the Temporary Framework for state aid:
    • Austria has introduced a guarantee scheme to support SMEs in the context of the COVID-19 outbreak. The scheme provides guarantees on working capital loans up to an amount of €500.000;
    • France has presented a €7 billion umbrella-scheme to support SMEs and large corporates affected by the COVID-19 outbreak. The scheme materializes through direct grants, repayable advances, public guarantees on loans and loans at favorable terms;
    • Hungary introduced an €88 million wage subsidies support scheme for researcher and developers active in all sectors;
    • Portugal set up a €140 million aid scheme to support investment in research and development, testing and production of products relevant to the COVID-19 outbreak.

17 April

  • Following the publication of the Commission’s roadmap on the relaxation of contingency measures across the EU, preparations for the post-COVID are in full swing and expected to continue in the weeks ahead. The Commission is expected to adopt a revised work program for 2020 and a revised proposal for the multi-annual financial framework by the end of April.
  • Next week, EU leaders are convening in a remote European Council meeting, in which they are expected to further discuss the economic consequences of COVID-19 and subsequent economic recovery measures following the heated Eurogroup meeting last week. EU leaders still need to find agreement on some outstanding issues before the 540 billion aid package becomes operational. Furthermore, the different exit strategies and the Commission’s roadmap are expected to be on the agenda.
  • Furthermore, various parliamentary committees will hold remote meetings next week and exchange views with responsible Commissioners on the EU’s response to COVID-19. The Transport and Tourism committee will host Internal Market Commissioner Breton for a discussion on the tourism sector, whereas the Environment, Public health and Food Safety committee will host Health Commissioner Kyriakides and the committee on International Trade will host Trade Commissioner Hogan.
  • Following its recommendation earlier this week, the European Commission published a guidance on data protection for the introduction of contact tracing applications to monitor spread of COVID-19. The Commission recommends a voluntary contact tracing, using Bluetooth to exchange anonymized location data between individuals’ mobile devices. This way, the applications should fully respect EU privacy rules;
  • The European Commission approved several national support schemes under the Temporary Framework for state aid:
    • Austria set up a scheme to support SMEs in the context of COVID-19. The scheme provides guarantees for underlying loans up to an amount of €500.000;
    • Hungary introduced a scheme of €1 billion to support companies through direct grants, loans and equity measures financed by the EU structural funds.

16 April

  • Last week, the Commission has sent a draft proposal for consultation to Member States to further extend the State Aid Temporary Framework. The Commission proposes to allow recapitalization of companies in need, but also notes that recapitalization is a last-resort-measure and will be subject to strict provisions. The COVID-19 outbreak has confronted many non-financial undertakings with losses and decreases in equities, worsening their ability to borrow from financial institutions. Member States will be allowed to, under certain conditions, acquire equities of undertakings that cannot find market solutions. Member States are currently analyzing the draft proposal to be able to provide feedback. The Commission is expected to publish the extended guidelines for state aid this week.
  • Equity instruments and debt financing instruments will only be accessible to undertakings that face serious difficulties to maintain its operations and have no possibilities to find market solutions. Undertakings benefiting from recapitalization will be bound by rules related to market behavior. Until the recapitalization has been repaid to the state, undertakings are not allowed to acquire competitors unless this is needed to maintain the viability of the undertaking. Recapitalization cannot be used for cross-subsidization of other economic activities, payment of dividends or advertising purposes. Furthermore, the distortion of competition should be limited by refraining from aggressive commercial strategy and more stringent behavioral measures can be imposed upon beneficiaries with significant market power.
  • The Croatian Presidency of the Council of the EU and the Commission issued a joint statement after the videoconference of EU trade ministers. The ministers discussed the continuation of global supply chains as a consequence of the COVID-19 pandemic. They were positive about the Commission’s proposal for a new export authorization measure for specific items of personal protective equipment;
  • The European Commission published a toolbox on mobile applications to support contact tracing in the EU’s fight against COVID-19;
  • During today’s extraordinary European Parliament plenary session, Commission President Von der Leyen delivered a speech on the EU coordinated action to combat COVID-19 and its consequences.
  • The European Commission approved several national support schemes under the Temporary Framework for state aid:
    • Denmark set up a guarantee of approximately €137 million on a revolving credit facility in favour of Scandinavian airline SAS;
    • Latvia introduced a €35.5 million direct grant support scheme for agricultural, fishery, food and school catering sectors.

15 April

  • The COVID-19 outbreak has significantly shaken up the policy agenda of the European Commission. As a consequence, the Commission has to re-order its priorities. Several policy initiatives now face delays or are postponed. The Commission is expected to publish a revised work program for 2020 by the end of April. The focus is in first instance on those initiatives that will directly contribute to overcoming the COVID-19 crisis. Other initiatives may be postponed until we return to business as usual.
  • Not only the European Parliament seeks involvement in designing the recovery phase, there is also mounting pressure from other parties: following the call from thirteen EU environment ministers to place the European Green Deal at the heart of the EU’s post-pandemic recovery plan, the ‘Green Recovery Alliance’ was launched yesterday, bringing together multiple Members of European Parliament, CEO’s, civil society groups and business associations in a call for a green recovery.
  • The European Commission has today officially published the Communication A European roadmap to lifting coronavirus containment measures. Commission President Ursula Von der Leyen stated that the roadmap is a “catalogue of guidelines, criteria and measures that provide a basis for thoughtful action”. The Commission also published a factsheet that concisely sets out the key principles of the roadmap.
  • Von der Leyen has called for a ‘huge’ initiative within multi-annual financial framework 2021-2027 to trigger the trillion-euro investment initiative needed for the EU’s economic recovery.
  • As a part of the European roadmap to lifting coronavirus containment measures, the Commission presented guidelines on COVID-19 testing methodologies. Sufficient testing capacity is considered an essential prerequisite for lifting containment measures.
  • The European Commission approved several national support schemes under the Temporary Framework for state aid:
    • Bulgaria set up a €770 million wage subsidy support scheme covering 60% of wage costs of undertakings in the sectors most affected by confinement measures;
    • Czech Republic introduced a €37 million aid scheme to support investments by SMEs in the production of products that are relevant to the COVID-19 outbreak;
    • France prolonged and modified the existing Solidarity Fund. The amended scheme increases support to small and micro-companies and self-employed people. The budget for March 2020 amounts to €1.7 billion and the budget for April 2020 amounts to €2.9 billion;
    • Sweden introduced a €453 million rent rebate scheme for tenants operating in sectors for hotels, restaurants, retail and certain other activities.
  • The four biggest political groups in the European Parliament (the EPP, S&D, Renew Europe, Greens/EFA) support the introduction of ‘recovery bonds’, guaranteed by the EU budget, to mitigate the economic consequences of the COVID-19 crisis. The European Parliament will vote on the resolution during tomorrow’s extraordinary plenary, before the European Council of 23 April will discuss the financing of a ‘Recovery Fund’.

14 April

Tomorrow, the Commission will publish a Communication on a European Roadmap towards lifting COVID-19 containment measures. This roadmap, previously dubbed as the ‘Exit Strategy’ formulates recommendations to Member States in an attempt to coordinate national exit strategies across the EU. The roadmap mentions three key criteria to determine whether the time has come to start relaxing confinement measures:

  1. The spread of the disease has significantly decreased for a sustained period of time;
  2. Health system capacity provides for sufficient hospital beds, pharmaceutical products and equipment;
  3. Monitoring capacity provides for large-scale testing to detect and monitor the spread of the virus combined with contact tracing.

Moreover, the Commission recommends Member States to lift measures gradually, leaving one month between different steps to be able to measure the effect over time. Lifting measures should also start with those having a local impact and be gradually extended to a broader geographic coverage. When it comes to the internal border restrictions within the EU, the Commission wants these restrictions to be lifted once the epidemiological situation in bordering Member States has converged and when social distancing is widely applied. Opening the EU’s external borders is a second stage and should consider the spread of the virus in other parts of the world.

The Council of the EU has adopted two draft amending budget proposals to free up funds to respond to the COVID-19 outbreak. The first proposal increases commitments by €567 million and payments by €77 million, and will support Greece in dealing with migratory pressures and Albania in the aftermath of the earthquake in November 2019. The second proposal earmarks an additional €3 billion in commitment and €1.53 billion in payments, and will be used for stockpiling and distribution of essential medical supplies. The European Parliament is expected to approve the two proposals next Thursday in the extraordinary plenary session;

Executive Vice-President of the Commission, Valdis Dombrovskis, has stated that the EU could finance a recovery fund of up to €1.5 trillion with bonds that would be guaranteed by Member States;

The European Commission approved several national support schemes under the Temporary Framework for state aid:

    • Belgium will set up a deferral payment measure of the concession fees owed by the Walloon airports to the Walloon authorities, to support airport operators during the COVID-19 crisis. The scheme will be accessible to operators of the Charleroi and Liège airports and offers them the possibility of deferring fees that would be due for 2020;
    • France established a €10 billion scheme to support the domestic credit insurance market. Trade credit insurance protects companies supplying goods and services against the risks of non-payment by their clients, and with the risk of non-coverage by insurers increasing, the French state protects companies with this guarantee scheme;
    • Germany has introduced a guarantee scheme to stabilize the trade credit insurance market. Germany also amended its support schemes to further ease liquidity constraints;
    • Italy set up two guarantee schemes to support the economy during the COVID-19 crisis. The general guarantee scheme has a budget of up to €200 billion and will enable public guarantees on new loans and on refinancing existing loans for all businesses, including large companies. Italy also introduced a guarantee scheme devoted to support self-employed workers, SMEs and mid-caps by  providing state guarantees on investment and working capital loans;
    • Romania introduced a €3.3 billion scheme to support SMEs. The scheme helps SMEs to cover investment and working capital needs;
    • Sweden has presented a loan guarantee scheme to support airlines affected the COVID-19 outbreak. The scheme has a budget of up to €455 million and aims at providing airlines operating in Sweden with liquidity.

10 April

Yesterday night, the Eurozone Finance Ministers finally reached an agreement on an economic aid package worth €540 billion. The compromise that has been reached entails three safety nets:

  1. ‘Pandemic Crisis Support’ of €240 billion from the European Stability Mechanism (ESM), which can be used for direct and indirect medical costs related to COVID-19. Credit lines that are used for medical costs are exempted from the normal conditionality for structural reforms, but future use of ESM credit lines for economic recovery will be subject to the regular rules again;
  2. €200 billion of investment by the European Investment Bank (EIB) to help companies, particularly SMEs, to counteract on the economic downturn due to the COVID-19 outbreak. This investment is backed by a €25 billion European Guarantee Fund set up by the Eurogroup;
  3. €100 billion will come from the new short-time work scheme (SURE) of the European Commission. This fund will transfer money to national governments in order to stimulate the introduction of national short-time work schemes, aimed at keeping up employment during the crisis.

A fourth pillar will be worked on in the coming weeks and involves the establishment of a Recovery Fund.

Eurogroup President Mário Centeno has stated that the ESM support should be operational within two weeks. The investment by the EIB and credit lines by the ESM do not require further legislative approval, but the Commission’s proposal for SURE will still need to be approved by the co-legislators. The European Parliament is expected to approve the scheme during its extraordinary plenary next week on 16 and 17 April, after which the Council is expected to adopt the scheme by written procedure.

 Yesterday, the European Commission sent Member States a draft proposal to further extend the scope of the State Aid Temporary Framework. The Framework was adopted on 19 March and was already extended to include public support for research, testing and relevant products on 3 April. Member States are now consulted on a possible extension to enable them to provide recapitalizations to companies in need. Recapitalization should remain a last-resort-measure and will be subject to strict governance provisions;

European Commissioner for Economy, Paolo Gentiloni, delivered a speech to reflect on the outcome of the Eurogroup meeting. Gentiloni welcomed the outcome of the meeting and stressed that the European Commission will work on the long-term recovery via the new MFF proposal by the end of April;

The European Commission approved several national support schemes under the Temporary Framework for state aid:

    • Belgium introduced a €3 billion guarantee scheme for working capital and investment loans to support the companies in the Flemish region;
    • Croatia introduced a €1 billion support scheme, which will provide zero-interest loans and loans with subsidized interest rates;
    • Lithuania set up a €150 million scheme enabling the granting of loans at favorable terms, to help businesses cover immediate working capital needs;
    • Poland presented a €115 million scheme to relieve companies from part of the interests they have to pay on loans.

9 April

  • In order to find a way out of the COVID-19 crisis, multiple Member States believe that the use of mobile data applications could serve as an effective instrument to trace the spread of the virus. The use of such applications could warn citizens about infected bystanders, or communicate their symptoms to the hospital or general practitioner. In order to introduce these applications in a coordinated fashion across the EU, the Commission yesterday issued a recommendation for an exit strategy through the use of mobile data and applications. The recommendation follows a statement by the European Data Protection Supervisor earlier this week, who called for “a pan-European model ‘COVID-19 mobile application’ coordinated at EU level”.
  • The use of these applications can be a breakthrough for public health purposes and to get a better understanding of the spread of the virus. At the same time, the use of these applications, which process the location data of people, has already led to privacy concerns among the European citizens. The EU is often lauded for the General Data Protection Regulation (GDPR), but the introduction of tracing applications poses a threat for Member States to comply with this act. In its recommendation, the European Commission emphasizes that Member States are encouraged to only use fully anonymized and aggregated mobile location data, which cannot be shared with third parties and is only stored as long as necessary. The coming weeks will show how Member States assess the trade-off between public health and privacy.
  • The European Commission has invited the Schengen Zone Member States to extend the temporary restriction on non-essential travel to the EU until May 15. The first travel ban was approved by Member States on 17 March for a period of 30 days;
  • The European Commission approved several national support schemes in the context of COVID-19 under the Temporary Framework for state aid:
    • Austria introduced a €15 billion liquidity scheme in the form of grants and guarantees on loans for companies affected by the COVID-19 outbreak;
    • Bulgaria has established a 255 million guarantee scheme for micro, small and medium-sized companies to cover immediate working capital and investment needs;
    • Greece has set up a €1.2 billion scheme providing grants for SMEs;
    • Hungary introduced a €140 million scheme that provides direct grants to SMEs to mitigate the economic impact of the pandemic;
    • Lithuania has introduced a €110 million guarantee scheme to support the economy;
    • Luxembourg presented a €30 million scheme to support COVID-19 related research and development (R&D) and investments in the production of products to the outbreak;
    • Poland set up a €700 million aid scheme providing public guarantees on loans and loans with subsidized interest rates;
    • Portugal introduces a 20 million credit line scheme to support fishery and aquaculture.
  • Renew Europe is working on a draft resolution on how to fight the COVID-19 pandemic. The resolution stresses the need for sufficient support for SMEs and for the introduction of recovery bonds guaranteed by the EU budget. These recovery bonds are comparable to Eurobonds but will not involve the mutualization of existing debt and will only be oriented towards future investment.

8 April

  • Yesterday’s Eurogroup meeting ended in deadlock after sixteen hours of negotiations, as the Eurozone Finance Ministers failed to reach an agreement on an EU safety net against the COVID-19 fallout. According to Eurogroup President Mário Centeno, the Finance Ministers were close to an agreement. Dutch Finance Minister Hoekstra announced the Eurogroup reached agreement already on using the European Investment Bank to support companies affected by the COVID-19 crisis, and on activating the European Stability Mechanism (ESM) unconditionally for medical costs.
  • However, it appeared impossible at this stage to reach an agreement on the use of Eurobonds and the wider use of the ESM. Firstly, there is disagreement on the Italian proposal for Eurobonds. An opposition of Member States such as the Netherlands, Austria and Finland seems uncompromising. Secondly, a conservative group of Member States wants to maintain the application of conditionality for future ESM loans for economic recovery, whereas Southern Member States want to forego the requirements attached to ESM loans. Eurozone Finance Ministers will continue the discussions tomorrow.
  • Furthermore, the Commission has decided to postpone the anticipated communication on the exit strategy, as Member States such as Italy, France and Spain indicated they were insufficiently consulted in the process. The communication, which envisages a coordinated response to relax the lockdown measures across Member States, is now expected to be published next week.
  • The European Commission published a Temporary Framework Communication to provide antitrust guidance on allowing limited cooperation among competitors in COVID-19 related urgency situations. The Communication primarily aims at ensuring a sufficient supply of essential goods in the context of the COVID-19 crisis. The Communication applies as of today until further notice;
  • The European Commission today launched, together with the European Investment Fund (EIF), the ESCALAR pilot phase for 2020. This new investment approach will immediately provide €300 million aiming to increase the investment capacity of venture capital and private equity funds, triggering investments of up to €1.2 billion to support promising companies (scale-ups). The pilot is linked to the new SME Strategy, but is particularly relevant in the COVID-19 context (call opened today);
  • The European Commission has approved several national support schemes under the Temporary Framework for state aid:
    • Denmark set up a €5.4 billion scheme to compensate companies that have a proven decline of more than 40% of revenues between 9 March and 9 June 2020;
    • Greece introduced a repayable advances scheme amounting to an estimated €1 billion. The scheme is open to all companies and applies to the whole territory of Greece.
  • The European Commission today published its recommendation for steps and measures to develop a common EU approach for the use of mobile applications and mobile data in the exit strategies from the COVID-19 lockdown. The centrepiece of the recommendation is the proposal for a joint toolbox towards a coordinated approach for the use of smartphone apps in line with EU data protection rules. Several Member States are planning to introduce location data applications for smartphone as part of their lockdown release measures, which has led to privacy concerns;

7 April

  • EU leaders are already thinking about a long-term recovery plan for Europe, often dubbed the ‘new Marshall Plan’, referring to the massive grant scheme provided by the US to stimulate the European economy after World War II. However, European leaders seem to have different views about what such a Marshall Plan would entail and who would have to pay for it.
  • European Commission President von der Leyen argues the new multi-annual financial framework (MFF) should become the instrument to stimulate the European economy in a post-COVID-19 era. The Commission is expected to publish a new proposal for the MFF on 29 April. However, in order to provide the necessary stimulus, Member States’ contribution should increase significantly. Despite the growing pressure to adopt the MFF proposal as soon as possible, it is expected that the impact of COVID-19 will further complicate the MFF negotiations, especially as unanimity is needed among the Member States. The real firepower is expected to come from the European Central Bank and European Investment Bank.
  • In comparison, when European leaders such as the Spanish PM Sánchez and the Italian PM Conte call for a Marshall Plan, they refer to the deployment of credit lines via the European Stability Mechanism (ESM) for the short-term, but in the long term they would like to see the introduction of Eurobonds to make sure the European continent is rebuilt without creating an economic cleavage between North and South. Tomorrow’s Eurogroup and the upcoming MFF proposal are expected to answer the question which instrument will serve as a Marshall Plan for the COVID-19 era, and more importantly, where the resources will have to come from.
  • Ahead of the Eurogroup meeting, Dutch Finance Minister Wopke Hoekstra stated the Netherlands is open to use the ESM without strict conditions for health care, but not for the economy. The Netherlands is furthermore against the idea of Eurobonds but would rather propose to transfer a €10 to €20 billion one-off gift to the most affected EU Member States. This afternoon, the Dutch government expressed its approval of this government position;

6 April

  • The European Commission has adopted the amendment to the Temporary Framework for state aid rules. The extension broadens the scope of the framework to enable Member States to provide more types of state aid. The following five types of state aid are added to the current framework:
      1. Support for COVID-19 related research and development;
      2. Support for the construction and upscaling of testing facilities;
      3. Support for the production of products relevant to tackle the COVID-19 outbreak;
      4. Targeted support in the form of deferral of tax payments and suspensions of social security contributions;
      5. Targeted support in the form of wage subsidies for employees.

 

  • Furthermore, the temporary framework also expands on the already existing types of support that Member States can provide to companies in need. The framework enables Member States to give zero-interest loans, guarantees on loans covering 100% of the risk, or provide equity up to the nominal value of €800.000 per company. This can be combined with other types of aid, such as ‘de minimis’ aid (to bring up aid per company to €1 million). These measures should address the liquidity needs for small and medium-sized companies in a speedy manner. The current Temporary Framework will be in place until December 2020. Extension of the Framework will be reviewed at a later stage.
  • The European Commission has unlocked €1 billion from the European Fund for Strategic Investments to serve as a guarantee to the European Investment Fund (EIF), part of the European Investment Bank Group. This allows the EIF to issue special guarantees to incentivize banks to provide liquidity to at least 100.000 small and medium-sized enterprises (SMEs) affected by the COVID-19 crisis for an estimated financing of €8 billion;
  • European Commissioners Breton and Gentiloni have written an op-ed in which they call for a European fund which would “specifically be designed to issue long-term bonds”. European Commission President Von der Leyen does not seem supportive of this proposal, and wrote an op-ed in which she instead focuses on the new EU budget to reflect a Marshall Plan for Europe;
  • France proposed a European fund that can issue a common debt of up to 3% of the EU’s GDP (around €420 billion). A package of economic measures will be discussed during tomorrow’s Eurogroup meeting;
  • The European Commission has approved multiple national support schemes under the newly adapted Temporary Framework for state aid:
    • Croatia found a €790 million liquidity guarantee scheme for companies affected by the COVID-19 outbreak. The support will be accessible to all companies whose exports represent at least 20% of their yearly revenue;
    • Greece approved a €2 billion Greek aid scheme to support the economy in the context of the COVID-19 outbreak. The scheme enables the granting of guarantees on working capital loans;
    • The Netherlands introduced a €23 million package to assist providers of social support services, health care services and youth care by facilitating remote care via internet applications;
    • Portugal notified the Commission of two schemes with a total budget of €13 billion. The schemes enable Portugal to provide direct grants and public guarantees on loans, to assist SMEs and large companies in covering investment and working capital needs and continue their activities;
    • Poland introduced a scheme enabling public guarantees up to €22 billion to support the economy. The supports consists of public guarantees on investment loans and working capital loans;
    • The United Kingdom has set up a £50 billion umbrella scheme to support the economy. The scheme includes direct grants, state guarantees for loans, subsidized public loans with favorable interest rates and support for the production of products relevant to fight the COVID-19 outbreak.

3 April

  • Following a week full of new contingency measures, next week will be centered around the post-corona era. Next Tuesday, Eurogroup President Mário Centeno will welcome the Eurozone’s Finance Ministers to discuss the economic response to COVID-19. On the agenda are four economic instruments: this week’s proposed short-time work scheme (SURE), the potential deployment of credit lines under the European Stability Mechanism (ESM), the proposal by the European Investment Bank to mobilize €200 billion in guaranteed loans for companies, and finally, the establishment of a COVID-19 Emergency Fund. As northern Member States such as Germany, Austria, Finland and the Netherlands do not support the option of Eurobonds, the establishment of ESM credit lines (draft) seems more likely. With regards to the COVID-19 Emergency Fund, the French and Dutch proposals are up for discussion.
  • Next Wednesday, the European Commission is expected to publish a Communication on the exit strategy. The strategy will set out a coordinated approach of eventually relaxing the restrictive measures put in place by EU countries to contain the spread of COVID-19. According to the Commission, the normalization of daily life will be most effective and safest when carried out in a coordinated fashion. As requested by European leaders, the exit strategy might already formulate plans for a long-term recovery plan. However, these long-term plans will most likely be shaped by the new proposal for the Multi-annual Financial Framework 2021-2027, which is expected be published later this month.
  • The European Commission has approved a request by Member States to waive customs duties and value-added tax on the import of medical equipment from non-EU countries. This measure will contribute to lower prices, and the temporary measure will apply for at least four months, but this can be extended if necessary. Commission President Von der Leyen delivered a video message on the decision;
  • The European Commission again approved several state aid programs under the Temporary Framework:
    • Denmark will set up a €200 million loan facility in support of the Travel Guarantee Fund, which provides reimbursements to travelers in case of travel cancellations;
    • Germany will extend a scheme for subsidized loans for all companies of the real economy. Where loans were first only granted by the German Kreditanstalt für Wiederaufbau, regional authorities and promotional banks can now also provide support;
    • Malta introduced a €350 million guarantee scheme to support the economy in COVID-19 outbreak;
    • Spain will establish an umbrella-scheme to support self-employed, SMEs and large companies in the form of direct grants, repayable advances, tax advantages and loans;
    • Sweden introduced a €9.1 billion guarantee scheme on new loans granted by commercial banks to support companies, mainly SMEs.

2 April

  • Today, European Commission President von der Leyen presented the EU’s ‘Coronavirus Response’ initiative to mobilize every euro available in the EU budget to mitigate the impact of COVID-19. This initiative follows the first package of economic measures, including the Coronavirus Response Investment Initiative, worth €37 billion, and the provided flexibility to Member States in terms of state aid and fiscal measures.
  • The most important aspect of the Corona Response initiative is the proposal for a regulation establishing a European instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE). The SURE initiative mobilizes €100 billion in loans to Member States in order to ensure that they set up short-time work schemes keeping people employed and businesses running. This budget is made possible because of €25 billion of guarantees by Member States. To get an understanding of how SURE works in practice, please find the Commission’s factsheet here.
  • The second important aspect of the initiative is the Coronavirus Response Investment Initiative Plus (CRII+) proposal. The CRII+ complements the earlier announced CRII by introducing extraordinary flexibility that allows all non-utilized support from the European Structural and Investment Funds to be mobilized. In practice, CRII+ allows for all financial resources left in the current Multi-annual Financial Framework 2014-2020 (MFF) to be utilized to battle COVID-19. Von der Leyen asked both co-legislators to act swiftly and approve these proposals as soon as possible.
  • Furthermore, von der Leyen stressed that the next MFF will be shaped in such a way that it is a crucial part of the EU’s recovery plan. The Commission is expected to publish a new proposal for the MFF in April with a view to conclude an agreement within two months.
  • European Parliament President Sassoli and the political group leaders have decided to plan another extraordinary plenary session on 16 and 17 April in Brussels. The meeting will again allow for remote voting. During this plenary, the Parliament will vote on a resolution on EU coordinated action to fight COVID-19. Moreover, the Parliament will vote on other legislative and budgetary proposals proposed by the Commission. The Conference of Presidents has also made available extra space in the calendar for remote meetings for EP governing bodies, committees and political groups, as can be seen in the adjusted EP agenda 2020, also published today;

1 April

  • The European Commission started working this week on an exit strategy and recovery plan for the post-COVID-19 era, as instructed by the European Council. The exit strategy will aim to prevent long-term damages to the European economy and labor market following the COVID-19 outbreak. The Commission formed an internal taskforce to work on the exit strategy, which consists of eight Commissioners. It is expected that the Commission will publish a Communication on the exit strategy on 8 April.
  • What does the anticipated exit strategy mean for the priorities of the Commission in a post-COVID-19 era? On a macro level, it is expected that the strategy will include long-term measures and proposals for structural reforms to stabilize the economy and mitigate unemployment, high debt levels and disrupted supply chains. The Commission already indicated that stimulating the green and digital transitions remain at the top of the policy agenda, but is it is likely that priorities will shift and policy areas like health care and employment will get the full attention. On a micro level, the reprioritization of the policy agenda might result in delayed or reframed policy initiatives in view of the new political dynamics.
  • In a push for solidarity, the exit strategy is expected to propose new legislation on establishing a European Unemployment Reinsurance Scheme worth 100 billion. It is yet unclear how this scheme will be financed; it is expected that Member States have to mobilize additional resources. The Commission could already publish the proposal for the scheme by tomorrow, making it possible for the Eurogroup to discuss the proposal next Tuesday. Moreover, the InvestEU program 2021-2027 is expected to get more firepower in order to support investments in strategic areas such as the labor market as well as to support SME’s in order to ensure the long-term resilience of the European economy.
  • Today, European Commission President Ursula Von der Leyen announced a European short-time work scheme, called SURE, that must ensure employment in the most affected EU countries. If employment is upheld during the COVID-19 crisis, people can maintain their normal spending patterns and this way the economic shock can be limited. The new instrument, which is guaranteed by all Member States and is a showcase of European solidarity, will be presented later this week, allowing the Eurogroup to discuss the proposal already next Tuesday.