COVID-19 EU Bulletin – Issue #2

Institutional Response 

European Commission 

State Aid 

• An overview of the state aid measures approved by the Commission so far can be accessed here. 
• The Commission has proposed to Member States to amend the current State aid Temporary Framework adopted on 19th March in order to allow for further Member State flexibility in responding to the liquidity challenges of European companies. The proposal is now with Member States. The Commission awaits comments and plans to have the framework in place this week. New measures proposed include: more support for COVID-19 R&D, more support for testing facilities, more support for production of products necessary to tackle the outbreak, tax deferrals and / or suspension of employers’ social security contributions, and targeted subsidies for wages. 
• The European Commission has decided to make export-credit insurance more widely available to help businesses facing the coronavirus crisis. The Commission changed existing rules to enable Member States to provide insurance for short-term export-credit risk in respect to all countries.  
• POLITICO journalists expect three waves of state aid: the first is currently ongoing after the establishment of the temporary framework, the second will target specific sectors such as travel and hospitality, and the third will target specific companies that are struggling, such as certain airlines. The commentators see three possible pitfalls: first, liquidity support measures are now limited at €800 million per company after strong industry lobbying. Second, aid can be granted to SMEs and non-SMEs. Third, export credit guidelines have been made more flexible and could possibly allow for abuse (source: POLITICO). 

Mobility 

• The Commission has issued guidelines that allow workers in predefined “critical occupations” to cross EU internal borders during ongoing COVID-19 related confinement measures. The list includes health professionals, child, and elderly care workers, scientists, medical device technicians, firefighters, police officers, transport workers, persons working in the food sector and fishermen. Agricultural workers are not included, and the Commission has asked Member States to exchange information on demand to react appropriately and allow workers to cross borders where necessary (source: POLITICO).  
• The Commission has issued guidelines to EU Member States to promote transport of goods by air during the time that COVID-19 related travel restrictions are in place. The guidelines ask countries to exempt plane crews without symptoms from travel restrictions and to lift restrictions such as night curfews or slot rules. Commissioner Valean stressed the urgency of the measures in a press release.  
• Member States have informed the Commission about difficulties in renewing certain licenses or certificates for professional carriers, including vehicle and vessel certificates for transport workers, due to public measures that have become necessary in view of the COVID-19 outbreak. The Commission expects several rules and regulations to be affected by this, not all of which provide a legal basis for the Commission to grant derogations. However, the Director-General of DG MOVE writes that the Commission may recognise exceptional difficulties to which Member States are exposed at the moment. The Commission suggests this approach in dealing with Member State solutions, provided that measures remain as limited as possible.   
• The Commission has published guidelines on the implementation of temporary travel restrictions at the borders as well as transit, repatriation, and visa aspects. They include reasons to refuse entry, security at checkpoints, exit checks, and exemptions.  

Digital: The Commission’s digital agenda is likely to be affected by the virus outbreak. The Digital Services Act is ready for consultation but needs initiation from Commissioner Breton, who is currently preoccupied with the production of medical equipment. Terrorist content legislation and the GDPR review, too, are expected to be delayed. On the other hand, initiatives on artificial intelligence, 5G, Network and Information Security, and data strategy are expected to go ahead as planned (source: POLITICO).  

Waste: National measures to battle the coronavirus are affecting waste shipment operations in the EU, with a likely more severe impact in the near future, according to a European Commission  guidance document. To minimise disruptions to the import and export of waste between EU countries, the Commission wants waste companies to use newly introduced green lanes to speed up border crossings.   

Antitrust: The Commission launched a website dedicated to the application of antitrust legislation during the COVID-19 crisis.  

Council 

• Eurogroup: President Centeno (who is also the Finance Minister of Portugal) has told his colleagues in a letter that the EU will emerge from the crisis with inevitably higher debt levels. Centeno hopes that those circumstances do not lead to fragmentation. To step up the group’s response to COVID-19, he calls on EU Finance Ministers to consider using mechanisms already in place, but he is expressly open to new, concrete, and well-justified proposals. The EU’s Finance Ministers will convene on Tuesday, 7th April to make proposals before Easter (source: POLITICO). 
• Trade: EU Trade Ministers are set to hold an informal meeting on 16th April via videoconference. EU Ambassadors will prepare it at their next meeting on 8th April. The agenda is still to be clearly defined given the wide range of trade-related consequences of COVID-19. Possible topics are the EU-wide export ban for protective medical equipment and investment screening to defend strategic companies from foreign takeovers (source: POLITICO). 
• European Council: In a joint statement of the Members of the Council, Heads of State and Government have called for EU recovery efforts to be in line with green goals. While currently, the fight against COVID-19 took priority, the statement reads, preparations to return to normal society should integrate green transition and digital dimensions.  Other conclusions of the video conference include a list of priorities, namely limiting the spread of the virus, providing medical equipment, promoting research, tackling socio-economic responses, and helping EU citizens stranded in third countries.  

European Parliament 

• Green Deal: 15 MEPs from the Greens, EPP, and S&D have asked President von der Leyen to not use the COVID-19 outbreak as a reason to delay the Green Deal. Instead, the letter reads, the Commission should follow the timeline set out and go ahead with the work programme. On the other hand, Czech MEP Vondra (ECR) is rallying support for a letter that demands a radical scale–back of Green Deal ambitions.  
• The European Parliament has approved a temporary suspension of EU rules on airport slots to stop air carriers from operating empty flights during the pandemic, meaning that airlines are not obliged to use their planned take-off and landing slots to keep them in the next corresponding season. 

International Organisations 

• G20: Leaders have vowed to do whatever it takes to overcome the COVID-19 crisis. In an extraordinary virtual summit organised by Saudi Arabia yesterday, participants said they would inject USD 5 trillion into the global economy to buffer the economic downturn. In a joint statement, leaders urged a coordinated international response, including the UN, the WHO, the IMF, and the World Bank. This is to contain the pandemic, but also to safeguard the economy. 

Member States

• Netherlands: The Dutch Government has postponed the announcement of its climate plans. Following a supreme court ruling, the Netherlands has to slash 25% of emissions this year. The Government was scheduled to announce a strategy on 1st April, but the deadline is now off the table.  

Medical Equipment and Vaccine Development  

• European companies are mobilising to help produce disinfectants that have become scarce over the past weeks. Particularly, countries that used processed alcohol or produce alcoholic beverages are now at the forefront of the new production force. But chemical production processes are subject to European chemicals rules. To help producers navigate those, the Commission has published guidelines on the applicable legislation for leave-on hand cleaners and disinfectants.  
• The European Commission has also published guidelines for the conformity assessment procedures for protective equipment, such as masks as well as for 3D printing products. 
• The European Commission intends to coordinate with India to ensure the provision of paracetamol. India imposed an export ban in early March. The Commission has now asked countries to flag their pharmaceutical needs in order to talk to India about possible solutions. Commissioner Kiriakides had already made initial steps (source: POLITICO). 

Financial Mobilisation 

• A group of 9 countries has advocated for common Eurobonds to be issued to provide cash to Governments in fighting the virus outbreak, amongst them Italy. A number of countries oppose the proposal, particularly the Netherlands. To counter the Dutch position, several Italian stakeholders, amongst them former Ministers, Mayors, and an MEP, have decided to take the conflict to the public. A paid full-page ad in the German Frankfurter Allgemeine Zeitung reminds Germans of their Nazi past and the debt that had been cancelled in the time of reconstruction. Germans should remember this past to make the right decision now (in favour of Eurobonds), the ad says. The text goes on to call the Dutch course “petty, national egoism”, aiming to weaken Europe.  
• The European Parliament has approved the Corona Response Investment Initiative, mobilising €37 billion.  
• The EU has amended Regulation (EC) No 2012/2002 in order to provide financial assistance to Member States and to accession countries that are seriously affected by a major public health emergency, mobilising €800 million in 2020. 

Other 

• The European automotive industry has asked the Commission for more time to comply with EU rules affecting the sector. According to a letter sent to President von der Leyen, “no production, development, testing or homologation work occurs for the time being,” which further delays compliance processes.  
• Emission trading system deadlines continue to apply for operators under the scheme. Energy-intensive operators such as power plants, industrial factories and airlines should present last year’s emission records by the deadline of 31st March and should surrender allowances matching its total emissions in 2019 by 30th April, the Commission said. Flexibility, however, is applied for measures such as on-site inspections (source: ENDS Europe).  

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Our monitoring reports aim to provide an overview of the most important EU and national developments in response to COVID-19. They include measures adopted by the EU Institutions and Member States, specific developments on the internal market and cross-border movements, information on delays of EU legislation, and major stakeholders’ reactions.

We will issue the reports 2-3 times per week depending on developments. If you have any questions or you need more information, please contact our Public Policy Director Tania Pentcheva.

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