Update from the European Institutions
In view of the rapidly evolving situation, the European Commission is defining the agenda of activities on a weekly basis. The Commission has postponed several publications due to COVID-19 outbreak. The majority of Commission staff is working from home, with only those fulfilling ‘critical functions’ required to work from the Commission’s premises. Within the Cabinets of the Commissioners and at top level in the Directorate-Generals, two or three designated employees deal with COVID-19 and liaise with industry stakeholders.
The European Parliament is currently exploring how it can fulfil its duties as co-legislator in a way that complies with travel restrictions and to minimize the risks of contagion for Members of European Parliament. Although the next official Plenary session is scheduled for 1-2 April, it is likely that an extraordinary Plenary session will be called for next week 25 March to adopt the Coronavirus Response Investment Initiative. The Conference of Presidents is expected to take a decision tomorrow or early next week.
At Council level, EU Ambassadors are likely to adopt a package of exceptional Council working measures today in order to ensure the continuity of decision-making activities. The measures will allow Council members who are unable to physically attend a meeting to do so via videoconference. On 17 March, the 27 EU leaders held a videoconference discussing the measures taken at national level. They will hold these videoconferences on a weekly basis to discuss progress and additional measures.
Initiatives at EU level
- The Council of the EU approved the two most important economic initiatives of the European Commission as a response to the COVID-19 outbreak: the proposal for a regulation concerning the Coronavirus Response Investment Initiative and the proposal for a regulation extending the scope of the EU Solidary Fund were adopted without amendments. It is now up to the European Parliament to approve these proposals, after which the Council will adopt the measures through a written procedure;
- In a videoconference in the evening of 17 March, the 27 EU leaders agreed to impose a temporary travel ban to enter the EU. This excludes essential staff, such as doctors and nurses, but also people transporting goods to continue the flow of products to the EU. This is to secure the supply of goods including essential items such as medicines, foods and components that EU factories need. European Commission president Von der Leyen gave a statement together with European Council president Charles Michel after the summit. It is expected, however, to be a matter of time until internal border restrictions will be put in place as well;
- The European Commission has postponed several publications due to COVID-19. The Updated Skills Agenda, which was scheduled for publication on 18 March, will be published on 6 May 2020. The Commission announced the Digital Education Action Plan will be published on 24 June 2020;
- The European Parliament’s Committee for Economic and Monetary Affairs (ECON) has issued a statement in which it expresses its support for the first steps taken by the EU and Member States to tackle the economic consequences of the COVID-19 pandemic. This is a first step to the EP’s approval of the Commission’s proposal for a Coronavirus Response Investment Initiative and an extension of the EU Solidarity Fund;
- France has officially announced its plans to support businesses, including nationalisation. As announced already yesterday, France will directly support businesses with liquidity injections of in total €45 billion. On top of this, €300 billion of state guarantees will be provided via banks.
- The Netherlands presented a package of economic measures to support companies and individuals that are economically impacted by the outbreak of COVID-19. The measures include reduced working hours (90% paid by state) on the condition the salaries are paid and no people are fired, €4.000 direct compensation for companies, three-months deferral of tax payments. There is no cap on the maximum government aid, but it is expected to add up to €10 to €20 billion in total;
- On 16 March, German Chancellor Merkel delivered a speech in which she announced drastic containment measures. All bars, restaurants and stores in Germany will close. Only supermarkets, pharmacies, banks, post offices and other important shops will stay open. Restaurants can only open between 06:00 and 18:00. Germany is taking economic measures such as deferral of tax payments, reduced working hours and liquidity injections to compensate for the economic hit these measures will deliver;
- Belgium has taken new measures to further contain the spread of COVID-19. Only essential movements will still be allowed until 5 April. Only stores that sell essential goods can stay open;
- Spain has introduced a new €200 billion financial package to help viable companies survive the economic impact of the COVID-19 outbreak. This aid comes in addition to the earlier announced €14 billion support. This unprecedented allocation of resources makes up 20% of Spain’s annual economic output. The main priority is to provide companies with the liquidity they need through public guarantees and the deferral in the payment of taxes;
- Portugal put aside €9 billion in economic support to deal with the economic downturn due to COVID-19. The package is worth 4,3% of GDP and is made up of €5.2 billion in fiscal stimulus, €3 billion in state guarantees and €1 billion related to social security payments;
- The United Kingdom has also presented a business loan package, worth £330 billion, to compensate for economic damage suffered due to COVID-19. UK Chancellor Rishi Sunak stated that the loan scheme, accounting for 15% of national GDP, will be operational as of next week.
- The Wall Street Journal and the Washington Post reported that the U.S. plans to launch an economic stimulus package of $850 billion. Finance Minister Steven Mnuchin is expected to pitch this plan to Republican senators on 17 March. $50 billion would be directed towards the aviation sector. The aim would be to have the package pass the senate by the end of the week. Official announcements on this package are expected later this week.
- The informal EP Conference of Presidents decided to hold a mini plenary session on 26 March which will replace the 1 April session. Voting will be by written procedures. Agenda will only be on the emergency measures on #COVID19 announced by the European Commission last Friday.