The common EU response to COVID-19 outbreak


The common EU response to COVID-19 outbreak
The European Union has mobilized various resources available to help Member States contain the spread of coronavirus and mitigate the socio-economic impact of the outbreak. To this end, EU leaders have agreed on a series of priorities to coordinate the EU’s response to COVID-19, including to support recovery after the coronavirus pandemic:
a. Public health measures
b. Measures to support jobs, businesses and the economy
Promotion of research, including to support vaccine development 
c. Measures to support re-establishment of transport and ensure safety of passengers and personnel
d. Joint European Roadmap towards lifting COVID-19 containment measures

Let’s have a closer look at these priorities.

a. Public health measures: a total of EUR 3 billion from the EU budget will be channeled through the Emergency Support Instrument and instrument RescEU to directly support healthcare systems in EU member states and help them buy urgent medical equipment and supplies. The EU has launched joint procurement procedures on behalf of 25 Member States to purchase medical equipment, and called on the relevant industry sectors to increase production of personal protective equipment.

b. Measures to support jobs, businesses and the economy are extensive and include:

  • European Instrument for temporary support to mitigate unemployment risks in an emergency - SURE: the instrument allows for a financial assistance of up to a total of EUR 100 billion in the form of loans from the EU to affected Member States from 1 February onwards to address sudden increases in public expenditure to preserve employment. The instrument will support short-time work schemes and similar measures to help member states protect jobs and thus employees and self-employed against the risk of unemployment and loss of income, and other measures in place to promote workplace health and safety as a response to the coronavirus outbreak.
  • EUR 20 billion of financing for SMEs and mid-caps by the EIB Group and the EU budget. 
  • Mobilization of EU budget to help SMEs: EU will take measures to improve the liquidity of businesses by redirecting EUR 1 billion from the EFSI under the COSME Loan Guarantee Facility and the InnovFin SME Guarantee under Horizon 2020 as a guarantee to the EIF, which will allow the EIF to issue special guarantees to incentivize financial intermediaries, banks and other lenders to provide liquidity to at least 100,000 European SMEs and small mid-cap companies hit by the economic impact of the coronavirus pandemic, for an estimated available financing of EUR 8 billion.
  • Coronavirus Response Investment Initiative (CRII) ensures immediate mobilization of structural funds to allow for a prompt response to the crisis and provide member states with an immediate liquidity. The Initiative proposes that the unspent ESIF funding is used in the areas of greatest need and gives member states flexibility in how they use this funding. The EU has directed the unallocated EUR 37 billion of cohesion policy funding within the 2014-2020 cohesion policy programmes to help member states fight the COVID-19 crisis and has proposed to abandon this year its obligation to request member states to refund the unspent pre-financing for the structural funds. This amounts to about EUR 8 billion from the EU budget which member states will be able to use to supplement EUR 29 billion of structural funding across the EU. The Commission will increase the scope of investment in 2020 and make sure that the unspent ESIF funding in the amount of EUR 29 billion is used in the areas where quick and flexible action is needed (the health sector, support for SMEs, the labour market). The money will be used to buy medical equipment, pay doctors and health workers, support the unemployed, keep people in jobs (wage subsidies for employees waiting to return to work and employees on reduced hours) and SMEs in business. CRII makes a total of EUR 114 million available to Slovenia (unspent pre-financing for 2019) and further EUR 86 million (pre-financing for 2020).
  • Coronavirus Response Investment Initiative Plus (CRII+) complements its forerunner and introduces extraordinary flexibility to allow that all non-utilized ESIF support can be mobilized to the fullest. This flexibility is provided for through transfer of resources between funds, categories of regions and policy objectives; the new initiative allows for a 100% EU co-financing rate for cohesion policy programmes for the accounting year 2020-2021, allowing member states to benefit full EU financing for crisis-related measures, and further simplifies management. CRII+ provides support to the most deprived by changing the rules for the Fund for European Aid to the Most Deprived (FEAD). For example, it will be possible to deliver food aid and basic material assistance through electronic vouchers. CRII+ also provides support to the fisheries and agricultural sector.
  • The scope of EU Solidarity Fund (EUSF), the EU tool helping countries recover from natural disasters like floods, wildfires, earthquakes, droughts and heavy winds, has been enlarged to include major public health crises. EUSF may grant financial assistance to Member States or candidate countries in the amount of up to EUR 1 billion per year.
  • Temporary State Aid rules applicable during the coronavirus outbreak allow member states to support the economy, help people and businesses and ensure liquidity of the economy. The Commission approved EUR 2 billion umbrella State Aid scheme to support the Slovenian economy in the coronavirus outbreak. The scheme envisages public support in the form of direct grants, wage subsidies, exemption from paying social security contributions, reduction of certain taxes and water fees, bank guarantees, deferred payment of certain credits and compensatory payments. Furthermore, the Commission approved EUR 2 billion Slovenian guarantee and rent relief scheme to support companies affected by the coronavirus outbreak.
  • Flexibility of the European fiscal framework by activation of fiscal framework’s general escape clause makes sure that Member States adopt measures to adequately tackle the coronavirus crisis, while departing from the budgetary requirements that would normally apply under the European fiscal framework.

c. Promotion of research, including to support vaccine development: the EU is boosting research for treatment and vaccines; EUR 48.2 million has already been granted to 18 projects and 151 teams to study SARS-CoV-2 virus and look into COVID-19 treatment. Researchers involved in the project HG nCoV19 testdeveloped a new rapid point-of-care diagnostic test for COVID-19 and obtained approval to put it on the market. The EU has mobilized EUR 140 million in public and private funding to develop vaccines, new treatments, diagnostic tests and medical systems to prevent the spread of the coronavirus and to save lives. In addition, the EU has offered CureVac, an innovative European vaccine developer, up to EUR 80 million of support through an EU guarantee of a European Investment Bank loan. The company aims to launch clinical testing of a vaccine by June 2020.

d. Measures to support re-establishment of transport and ensure the safety of passengers and personnel include assistance to stranded travelers in getting them safely back home, guidelines for border management and control and rules on protection of passenger rights under different border regimes etc.

The Government Office for Development and European Cohesion Policy (GODC), the Managing Authority for the ERDF, the ESF and the Cohesion Fund, is taking swift action to address any COVID-19-related challenges and issues that affect the implementation of EU Cohesion Policy in Slovenia. A dedicated subpage provides access to all current guidelines and recommendations of the GODC, the Slovenian Government and the European Commission on how Cohesion Policy should be implemented during the COVID-19 pandemic.

 

 

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