0

To cushion the blow to people’s livelihoods and the economy, the European Commission has adopted a comprehensive economic response to the outbreak, applied the full flexibility of the EU fiscal rules, has revised its State Aid rules and set up a €37 billion Coronavirus Response Investment Initiative to provide liquidity to small businesses and the health care sector.

In order to quickly address the fallout of the COVID-19 outbreak, the European Commission has proposed to set up a €37 billion Corona Response Investment Initiative directed at healthcare systems, small and medium enterprises, labour markets, and other vulnerable parts of our economies. The proposal entails relinquishing this year its refund obligations of unspent pre-financing from the European structural and investment funds currently held by Member States.

Coronavirus Response Investment Initiative

– Coronavirus Response Investment Initiative?
How does it work?

Member States can immediately address three key priorities in the fight against the current emergency and its economic consequences: spending on healthcare, support to short time work schemes, and support to the SMEs working capital.

To make this money available, the Commission is proposing to mobilise quickly cash reserves from the EU funds. This will provide immediate liquidity to Member States’ budgets and will help to frontload the yet unallocated €37 billion of cohesion policy funding within the 2014-2020 cohesion policy programmes, thus providing a much needed boost to economic investments.

The Commission is also making all Coronavirus crisis related expenditure eligible under cohesion policy rules. It will also be applying the rules for cohesion spending with maximum flexibility, thus enabling Member States to use the funds to finance crisis-related action. This also means providing greater flexibility for countries to reallocate financial resources, making sure the money is spent in the areas of greatest need: the health sector, support for SMEs, and the labour market.

EU Solidarity Fund

The EU Solidarity Fund will provide additional assistance of up to €800 million to the worst affected countries in order to alleviate the financial burden of the immediate response measures.

Coronavirus Response Investment Initiative Plus

On 2 April the Commission proposed to expand the Coronavirus Response Investment Initiative, adding several specific proposals. The Coronavirus Response Investment Initiative Plus initiative allows for the mobilisation of all non-utilised support from the Structural Funds (European Regional Development Fund and European Social Fund) and the Cohesion Fund to address the effects of the public health crisis on our economies and societies.

Solidarity – Responsibility

The Coronavirus outbreak presents a major challenge to the entire European Union. National, regional and local communities are on the frontline in countering the disease. Solidarity and responsibility across our societies and between Member States will be key to overcome this challenge. The benefit of collective and coordinated action as a community outweighs individual and parcelled responses. We have to take action to contain the spread of the virus and mitigate its impact to prevent straining public healthcare while reinforcing the responsiveness of our systems and to mitigate the considerable knock on effects on our economies.

The Commission has, therefore, launched a Coronavirus Response Investment Initiative (CRII) to mobilise cohesion policy to flexibly respond to the rapidly emerging needs in the most exposed sectors, such as healthcare, SMEs and labour markets, and help the most affected territories in Member States and their citizens. To this effect, the European Commission made a series of proposals on 13 March 2020 to amend legislation that will allow Member States to benefit from more financial back-up and targeted assistance.

The European Parliament voted almost unanimously in favour of the Commission proposals on 26 March. The Council has finally adopted the package on 30 March 2020. It enters into force on 1 April 2020.

Commissioners Ferreira and Schmit

On 18 March 2020 Commissioners Elisa Ferreira responsible for Cohesion and Reforms and Nicolas Schmit responsible for Jobs and Social Rights have sent letters to all the EU countries to inform them on the individual support they can receive under the Coronavirus Response Investment Initiative (CRII).

At technical level, the work with the relevant national administrations has already started and is progressing very well. The Commission has established a Task Force to serve as a one-stop shop for questions about the implementation of the initiative. A digital platform for swift exchange on their questions is now up and running and already counts over 300 questions that are promptly treated and replied.

The dedicated country teams have also started their work of identifying specific needs and designing the appropriate measures, also involving State Aid, EU financial rules and support from the European Investment Bank. Contacts are already taking place in order to take, swiftly, all the necessary steps.

Comments

Leave a reply

Your email address will not be published.

More in Economy

You may also like