Latest updates on COVID-19 and the EU

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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.

 Initiatives at EU level

  • 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 Council has approved a €3 billion assistance package to support countries in the EU neighborhood. The loans, with an average maturity of 15 years, will help these countries cover their immediate financing needs;
  • 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.

National measures

  • Czech Republic will open borders for buses and trains from 11 May onwards;
  • The German high court warned the European Central Bank (ECB) that bond buying could be illegal. The Constitutional Court ruled today the ECB has three months to justify the 2015 public sector purchase program (PSPP). The court said that the ruling does not affect the ECB’s Pandemic Emergency Purchasing Program of €750 billion;
  • Romania plans on starting to ease its lockdown as of 15 May, as the country’s state of emergency will expire on 14 May. Hairdressers, dentists and museums will be the first to reopen.

 Next steps

European Commission

  • 07/05: Commissioner Kyriakides holds a video conference with EU Health Ministers, the European Centre for Disease Prevention and Control, and the European Medicines Agency.

 Council of the EU

  • 06/05: Video conference EU-Western Balkans Zagreb summit;
  • 08/05: Video conference of the Eurogroup (agenda).

 European Parliament

  • 07/05: Video conference of Committee on Budgets (BUDG) (agenda);
  • 07/05: Video conference of Committee on Agriculture and Rural Development (AGRI) (agenda);
  • 07/05: Video conference of Committee on Foreign Affairs (AFET) (agenda);
  • 07/05: Video conference of Committee on Civil Liberties, Justice and Home Affairs (LIBE) (agenda);
  • 07/05: Video conference of Committee on Employment and Social Affairs (EMPL) (agenda).
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