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.
Initiatives at EU level
- 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.
- The Baltic states will coordinate their exit strategies and the reopening of borders, according the Lithuanian Prime Minister;
- Czech Republic has accelerated cutbacks in its lockdown restrictions. As of today, Czech citizens can travel abroad for any reason if they are being tested at the border and are undergoing a 14-day quarantine. As of Monday, driving schools, gyms, libraries, zoos and shops will be allowed to reopen. This speeds up the original schedule by two weeks, with the last stage now scheduled for 27 May;
- Poland will keep its schools closed until 24 May.
Council of the EU
- 27/04: Video conference of ministers of Tourism (agenda highlights);
- 28/04: Video conference of ministers of Energy (agenda highlights);
- 28/04: Video conference of ministers of Home Affairs (agenda highlights), including Schengen Associated Countries;
- 29/04: Video conference of ministers of Transport (agenda highlights).
- 28/04: College meeting via videoconference;
- This is the full agenda of the College of Commissioners for next week.
- 27/04: Video conference of Committee on Civil Liberties, Justice and Home Affairs (LIBE) (agenda);
- 27/04: Video conference of Committee on the Internal Market and Consumer Protection (IMCO);
- 27/04: Video conference of Committee on Agriculture and Rural Development (AGRI) (agenda);
- 27/04: Video conference of Committee on Fisheries (PECH) (agenda);
- 27/04: Video conference of Committee on Petitions (PETI);
- 28/04: Video conference of Committee on Transport and Tourism (TRAN) (agenda).