21 April 2020

COVID-19 EU Bulletin – Issue #7

Export authorisation scheme for PPE extended; EU calls for support to WHO; European Parliament frees up €3.8 billion for the healthcare sector.

Institutional Response

European Commission

  • COVID-19 and trade: The Commission’s DG Trade has published an assessment of the impact of the pandemic on global and European trade. Key findings of the report are that global trade is estimated to decrease by 9.7%, as well as a reduction of 9.2% in extra-EU27 exports of goods and services, and an 8.8% decrease in extra-EU27 imports in 2020. This is in contrast to the WTO estimates that world trade could reduce between 13% and 32% over the year. The report hints at the uncertainties brought about by the pandemic and announced new estimates for May.
  • Exporting PPE: The Commission has announced the extension of the export authorisation scheme for PPE currently in place but will adapt the scope of products concerned and improve the authorisation process. Commissioner Hogan (Trade) said in an exchange of views with the EP’s INTA committee on Tuesday, 21st April, that the Commission was discussing the scope of rules with Member States, and that the new scheme would exempt Balkan countries and humanitarian purposes. Furthermore, a Clearing House has been created to look at needs, demands, and shortages together with Member States. The new scheme will be in place for 30 days as of 25th
  • Supporting the WHO: After President Trump announced he would halt U.S. funding for the WHO, both Commissioner Kyriakides (Health) and High Representative Borrell came out in support of the organisation. Kyriakides urged health ministers in a conference call to “demonstrate your support to WHO clearly as, without our support, this vital organisation cannot perform its role.” Borrell sent the same message to the Foreign Affairs Council. Kyriakides added that there would indeed be a moment to assess the crisis management performed by WHO, but that moment was to come at a later time (source: POLITICO).
  • Agriculture: On Monday, the Commission published the latest short-term outlook report for EU agricultural markets, a regular publication assessing tendencies and prospects of the agri-food market. According to the publication, the pandemic brought novel challenges for producers, but the agricultural market was adapting flexibly. Particularly, consumer behaviour changed after the introduction of a widespread lockdown across the EU, meaning that restaurants and cafes had to close. On the other hand, dry and stockpiling goods such as pasta and rice saw an increase in demand. The EU has supported the agricultural sector with a host of measures.
  • More multilateralism: Jutta Urpilainen, Commissioner for International Partnerships, has called for more multilateralism in times of COVID-19. Even though the virus was forcing people to stay at distance, it should not drive international actors apart, the statement The Commissioner outlined which actions the EU was taking together with international partners. The three “lines of action” were emergency action to meet essential needs (e.g. PPE), supporting research, health, social and water systems in our partner countries, and working with international financial institutions to buffer the economic fallout resulting from the pandemic.
  • European Medicines Agency: The European Medicines Agency (EMA) outlined plans for remotely assessing regulatory compliance while the COVID-19 pandemic limits travel. The EMA and national regulators today published updates to a Q&A document for drugmakers and distributors. In essence, EMA calls for certifications of good manufacturing practices to extend automatically to 2021, if no new information warrants anything else.

European Parliament

  • The EP has approved delaying the Medical Device Regulation by a year. Initially due on 26th May, the planned delay comes to accommodate implementation difficulties brought about by the pandemic. The file is now going back to the Council.

Council (and other ministerial bodies)

  • Sustainable Trade: Dutch trade Minister Sigrid Kaag has called on the EU to re-think its approach to trade agreements after the COVID-19 crisis. In an interview with POLITICO that came after an informal meeting between European trade chiefs, the Minister said she would like the EU to have a closer look at sustainable value chains. According to the outlet, Kaag was preparing a corresponding proposal with her French counterpart, Lemoyne, linking sustainable development to trade. Kaag was also amongst those participants who asked the Croatian presidency to organise another Council meeting during its tenure, which would most likely take place virtually, if at all (source: POLITICO).

Member States

  • Finland’s parliament has raised concerns about SURE, the Commission’s employment re-insurance scheme. While Finland was generally supporting the measure, a detail regarding the guarantees to be issued by Member States is worrying the Nordic country’s legislative. SURE gives the Commission the right to call additional guarantees if a Member State should fail to pay or renounce theirs. Finland’s parliament, which has budgetary sovereignty, fears that if other countries default, Finland might be asked to pull much more than just its own weight. SURE was planned to be adopted this week, but this might now be delayed. The proposal now also features a sunset-clause limiting the programme to 2022 after countries like the Netherlands expressed concern (source: POLITICO).

International Organisations

  • World Trade Organisation: The WTO is finding its way of working during times of social distancing. According to POLITICO, the organisation’s ambassadors were open to conducting meetings virtually but were at the same time concerned about security and confidentiality of video conferences. This could also affect decision-making, which is likely to include written submissions. Developing countries are concerned about their technological capacity to participate in the virtual workings of the WTO. Additionally, writes POLITICO, many countries have to prioritise health and economic issues, leading to trade issues falling behind (source: POLITICO).
  • WTO and WHO: Director-Generals Azvedo (WTO) and Ghebreyesus (WHO) have issued a joint statement supporting efforts to ensure the cross-border flow of vital medical goods. Both are calling for coordinated, global action to fight the virus, and state that WHO and WTO were doing so together under the International Health Regulations from 2005, as well as WTO rules. The International Health Regulations have been drawn up to prevent, protect against, control and provide a public health response to the international spread of disease, while protecting international trade and traffic from interferences. Both the WHO and WTO are calling their members to share information on the measures they took to enable global cooperation.
  • World Health Organisation: The WHO has published guidelines for governments on how to gradually ease lockdowns. In essence, the paper urges states to take a piecemeal approach, prioritising regions with better containment and lower infection rates. Workplaces planning to reopen are called upon to take precautionary measures.

Tackling the Virus

  • The Commission, together with the European Bioinformatics Institute of the European Molecular Biology Laboratory, launched an online platform for the exchange of data on COVID-19. The platform allows scientists to share information and findings, for example on the genome of the virus, with their peers. When launching the platform, President von der Leyen said that no laboratory alone would be able to find the solution to the pandemic, but that scientists around the world had already created a “wealth of knowledge”.
  • In a letter to the Commission, the European Coordination Committee of the Radiological, Electromedical and Healthcare IT Industry (COCIR) has raised concerns about the export authorisation scheme for PPE currently in place until April 25th. According to the letter, the rules required companies to apply for an export license every time they were trying to move equipment outside the EU. COCIR members were trying to increase the production of vital medical equipment, such as ventilators, but because many of their factories were outside the EU, the export authorisation process hindered production because shipments of PPE to protect workers were delayed. COCIR suggested either issuing a global export license for certain kinds of product, so companies don’t have to apply for individual licenses every time; or allowing companies to export “for their own use in critical sectors.” (source: POLITICO).
  • Commissioner Breton will talk to Tim Cook, CEO of Apple, later this week. Breton and Cook are set to discuss the contact-tracing technology presented by Apple and Google in mid-April, intended to help track the spread of COVID-19. Breton stressed that such technology could be very useful to combat the outbreak, but that technology would have to fully respect European values and privacy and should be used voluntarily. Breton had already talked to Google’s Sundar Pichai last week (source: POLITICO).
  • The European Commission, led by the European Innovation Council and in close collaboration with the EU member states, will host a pan-European hackathon to connect civil society, innovators, partners and investors across Europe in order to develop innovative solutions for coronavirus-related challenges.

Financial Mobilisation

  • The European Parliament has freed up €3.8 billion to support the European Union’s healthcare sector. The funds will be channeled directly from the EU budget into the Emergency Support Instrument (€2.7 billion) and the rescEU stockpile (€380 million).
  • Spain has written a non-paper on a European recovery strategy. The paper proposes several steps designed to buffer the economic impact of COVID-19. First, the Eurogroup is to make swift decisions regarding ESM liquidity, EIB lending, and SURE funding. Second, the paper calls for the creation of a European Recovery Fund, raising funding for Member States through perpetual EU debt, allocated on the basis of the impact COVID-19 had on the respective countries. Spain suggests giving preference to national programmes that aim on ecological and digital transition, as well as industrial and technological autonomy. Third, the non-paper also calls for a revised MFF proposal, with a negotiation basis of 1.114% GNI. The publication calls for an MFF with “appropriate flexibility” as well as the reconsideration of an Investment Stabilisation Function and the introduction of a system of EU-own resources, raised through taxes, to raise the budget available above 1.2% GNI.

Other

  • Road Transport and COVID-19: The International Road Transport Organisation (IRU) has published a reporton the current situation of road transport internationally and in the EU. The publication acknowledges that all over the world, small successes have been achieved to ensure the flow of goods, but action was still needed, particularly to financially support SMEs and drivers. The implementation of green lines at European and external borders remained incomplete, IRU reported.
  • Sustainable Energy: In better news, the head of the International Renewable Energy Agency (IRENA), Francesco La Camera, has suggested that the current crisis will likely have less of an impact on the renewable energy sector than on the rest of the economy. Also pointing to the collapsing oil price, La Camera stressed that now was a good time for governments to end fuel subsidies without hurting consumers. The director general also called on governments to not use funds to bail out the fossil industry (source: ENDS Europe).
  • Airlines
    • Several airline bosses demanded they be included in the Commission’s high-level exchange with the two biggest European carriers, Lufthansa and Air France-KLM. President von der Leyen reportedly scheduled a meeting with the German and Franco-Dutch firms, probably to discuss how to get the industry’s fleets up in the air again. The CEOs of the remaining three of Europe’s five biggest carriers, Ryanair, EasyJet, and International Airlines Group wrote a letter strongly demanding a seat in first class.
    • Airlines all over Europe face reduced flight plans due to the pandemic, and some fare better than others. Government schemes have been put into place to support carriers, but selective support has sparked dissent. Reportedly, Ryanair complained that it was excluded from the French tax deferral system, and the French “aviation trade association FNAM actively lobbied against allowing EasyJet’s 1,700 French employees to qualify for a government-supported wage programme; EasyJet was eventually allowed into the scheme.” (source: POLITICO). Meanwhile, negotiations between Austrian Airlines’ parent Lufthansa and the Austrian government are ongoing, and any bailout will likely include green criteria. EP ENVI Chair Pascal Canfin (Renew) called for a similar course in the case of Air France-KLM.
  • Automotive
    • ACEA, the European Automobile Manufacturers’ Association, has drawn up guidelines to re-start the automotive industry. The four-point plan includes strategies to safely pick up production, stimulate demand, facilitate type-approvals, and invest into re-fueling and re-charging infrastructure. The guidelines come after the industry lobby published a “Code of Business Conduct in view of COVID-19”, including e.g. workplace safety, transparency, and fair competition.
    • Some industry members reportedly already designed plans to restart production while keeping workers safe (source: POLITICO):
      • Volkswagen (Germany): Workers are asked to check their own temperature before coming in to work. Canteens will remain closed or take away only, and social distancing marks will be introduced. VW also implements 100 more measures worked out together with unions.
      • Fiat Chrysler (Italy) will issue its workers with two surgical masks and a new pair of gloves every day, and a pair of new safety glasses every month. Fiat will also monitor temperatures using thermal cameras or remote temperatures when workers arrive.
      • Volvo (Sweden) has installed barriers between staff in break areas to impede the spread of the virus. Next to temperature checks, Volvo also offers to check workers’ oxygen saturation, albeit voluntarily.
      • Kia (Slovakia) introduced temperature checks outside of factories.
      • Hyundai also checks the temperature outside of facilities.
    • The German automotive lobby VDA has asked the country’s government for consumer incentives to increase demand after the lockdown ends. Hildegard Mueller, VDA chief, said she believed that broad support would be necessary to revive economic demand, in particular for vehicles. Previously, German politicians and auto CEOs have suggested to couple of measures such as a scrappage-scheme to the purchase of low emission vehicles.

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