Connect with us

EU Politics

European coordinated response to counter the economic impact of the Coronavirus

Published

on

COVID-19 is a severe public health emergency for our citizens, societies and economies with infections in all Member States. It is also a major economic shock to the EU. The Commission therefore presents today an immediate response to mitigate the socio-economic impact of  the COVID-19 outbreak, centred on a European coordinated response.

The Commission will use all the instruments at its disposal to mitigate the consequences of the pandemic, in particular:

–          To ensure the necessary supplies to our health systems by preserving the integrity of the Single Market and of production and distribution of value chains;

–          To support people so that income and jobs are not affected disproportionally and to avoid permanent effect of this crisis;

–          To support firms and ensure that the liquidity of our financial sector can continue to support the economy

–          And to allow Member States to act decisively in a coordinated way, through using the full flexibility of our State Aid and Stability and Growth Pact Frameworks.

President of the European Commission, Ursula von der Leyen, said: “The Coronavirus pandemic is testing us all. This is not only an unprecedented challenge for our healthcare systems, but also a major shock for our economies. The important economic package announced today deal with the situation of today. We stand ready to do more as the situation evolves. We will do whatever is necessary to support the Europeans and the European economy.”

State aid Framework Flexibility

The main fiscal response to the Coronavirus will come from Member States’ national budgets. EU State aid rules enable Member States to take swift and effective action to support citizens and companies, in particular SMEs, facing economic difficulties due to the COVID-19 outbreak.

Member States can design ample support measures in line with existing EU rules. First, they can decide to take measures, such as wage subsidies, suspension of payments of corporate and value added taxes or social contributions. In addition, Member States can grant financial support directly to consumers, for example for cancelled services or tickets that are not reimbursed by the operators concerned. Also, EU State aid rules enable Member States to help companies cope with liquidity shortages and needing urgent rescue aid. Article 107(2)(b) TFEU enables Member States to compensate companies for the damage directly caused by exceptional occurrences, including measures in sectors such as aviation and tourism.

Currently, the impact of the COVID-19 outbreak in Italy is of a nature and scale that allows the use of Article 107(3)(b) TFEU. This enables the Commission to approve additional national support measures to remedy a serious disturbance to the economy of a Member State.

The Commission’s assessment for the use of Article 107(3)b for other Member States will take a similar approach. The Commission is preparing a special legal framework under Article 107(3)(b) TFEU to adopt in case of need.

The Commission stands ready to work with all Member States to ensure that possible national support measures to tackle the outbreak of the COVID-19 virus can be put in place in a timely manner.

European Fiscal Framework Flexibility

The Commission will propose to the Council to apply the full flexibility provided for in the EU fiscal framework so that they can implement the measures needed to contain the coronavirus outbreak and mitigate its negative socio-economic effects.

First, the Commission considers that the COVID-19 pandemic qualifies as an “unusual events outside the control of government”. This allows accommodating exceptional spending to contain the COVID-19 outbreak such as health care expenditure and targeted relief measures for firms and workers.

Second, the Commission will recommend adjusting the fiscal efforts required from Member States in case of negative growth or large drops in activity.

Finally, the Commission stands ready to propose to the Council to activate the general escape clause to accommodate a more general fiscal policy support. This clause would – in cooperation with the Council – suspend the fiscal adjustment recommended by the Council in case of a severe economic downturn in the euro area or the EU as a whole.

Ensuring solidarity in the Single Market

Only with solidarity and Europe-wide coordinated solution, we will be able to effectively manage this public health emergency. Solidarity is key in this crisis, in particular to ensure that essential goods, necessary to mitigate the health risks of the outbreak, can reach all those in need. It is essential to act together to secure production, stocking, availability and rational use of medical protective equipment and medicines in the EU, openly and transparently, rather than taking unilateral measures that restrict the free movement of essential healthcare goods.

The Commission is therefore taking all necessary steps to that end including by providing guidance for Member States on how to put in place adequate control mechanisms to ensure security of supply, and by launching an accelerated joint procurement procedure for these goods and issuing a recommendation on non CE-marked protective equipment.

The COVID-19 outbreak is having a major impact on our transport systems, given the close interlink of European supply chains, supported by an extensive network of freight services on land, at sea, and airborne. The Commission is working with Member States to ensure the flow of essential goods across land borders. The international and European aviation industry has been particularly hit. As announced by President von der Leyen on 10 March, to help ease the economic and ecological impact of the outbreak, the Commission is proposing today targeted legislation to temporarily alleviate airlines from the “use-it-or-lose-it” rule – whereby air carriers must use at least 80% of their airports slots within a given period in order to keep them within the corresponding period of the next year.

Finally, the Commission is liaising with Member States, international authorities and key EU professional associations to monitor the impact of the crisis on the tourism sector and coordinate support measures.

Mobilising the EU budget

To bring immediate relief to hard-hit SMEs, the EU budget will deploy its existing instruments to support these companies with liquidity, complementing measures taken at national level. In the coming weeks, EUR1 billion will be redirected from the EU budget as a guarantee to the European Investment Fund to incentivise banks to provide liquidity to SMEs and midcaps. This will help at least 100,000 European SMEs and small mid-caps with about EUR 8 billion of financing. We will also provide credit holidays to the existing debtors that are negatively affected.

Alleviating the impact on employment

We need to protect workers from unemployment and loss of income to avoid permanent effect. The Commission stands ready to support Member States in this, promoting, in particular short-time work schemes, upskilling and reskilling programmes that have proven effective in the past.

The Commission will furthermore accelerate the preparation of the legislative proposal for a European Unemployment Reinsurance Scheme aiming at supporting Member State policies that preserve jobs and skills.

Moreover, the Coronavirus Response Investment Initiative will facilitate the deployment of the European Social Fund – a fund geared towards supporting workers and healthcare.

The European Globalisation Adjustment Fund could also be mobilised to support dismissed workers and those self-employed under the conditions of the current and future Regulation. Up to EUR 179 million is available in 2020.

Coronavirus Response Investment Initiative

Under this new initiative, the Commission proposes to direct EUR 37 billion under Cohesion policy to the fight against the Coronavirus crisis. To this effect, the Commission proposes to relinquish this year its obligation to request Member States to refund 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. This will effectively increase the amount of investment in 2020 and help to front-load the use of the as yet unallocated EUR 28 billion of cohesion policy funding within the 2014-2020 cohesion policy programmes. The Commission calls upon the European Parliament and the Council to swiftly approve this proposal, so that it can be adopted within the next two weeks.

In addition, the Commission is proposing to extend the scope of the EU Solidarity Fund by also including a public health crisis within its scope, in view of mobilising it if needed for the hardest hit Member States. Up to EUR 800 million is available in 2020. 

Continue Reading
Comments

EU Politics

EU and Armenia Comprehensive and Enhanced Partnership Agreement enters into force

Published

on

On 1 March 2021, the European Union-Armenia Comprehensive and Enhanced Partnership Agreement (CEPA) will enter into force. It has now been ratified by the Republic of Armenia, all EU Member States and the European Parliament. This represents an important milestone for EU-Armenia relations.

This Agreement provides a framework for the EU and Armenia to work together in a wide range of areas: strengthening democracy, the rule of law and human rights; creating more jobs and business opportunities, improving legislation, public safety, a cleaner environment, as well as better education and opportunities for research. This bilateral agenda also contributes to overall aim of the EU to deepen and strengthen its relations with the countries of its Eastern neighbourhood through the Eastern Partnership framework.

High Representative of the European Union for Foreign Affairs and Security Policy/Vice-President of the European Commission, Josep Borrell, said: “The entry into force of our Comprehensive and Enhanced Partnership Agreement comes at a moment when Armenia faces significant challenges. It sends a strong signal that the EU and Armenia are committed to democratic principles and the rule of law, as well as to a wider reform agenda. Across political, economic, trade, and other sectoral areas, our Agreement aims to bring positive change to people’s lives, to overcome challenges to Armenia’s reforms agenda.”

Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, underlined that: “While these are trying times for Armenia, the European Union continues to stand by the Armenian people. The entry into force of the bilateral EU-Armenia agreement on 1 March will allow us to strengthen our work on the economy, connectivity, digitalisation and the green transformation as priority areas. These will have concrete benefits for the people and are key for socio-economic recovery and the longer-term resilience of the country. In the current turbulent days, maintaining calm and respect for democracy and constitutional order are key.”

The Agreement was signed in November 2017 and substantial parts of have been provisionally applied since 1 June 2018. Since then, the breadth and depth of the bilateral cooperation between Armenia and the European Union have advanced steadily. At the 3rd EU-Armenia Partnership Council held on 17 December 2020, the European Union and Armenia reiterated their full commitment to implementing the CEPA.

The Agreement plays an important role for the modernisation of Armenia, in particular through legislative approximation to EU norms in many sectors. This includes reforms in the rule of law and respect of human rights, particularly an independent, efficient and accountable justice system, as well as reforms aimed at enhancing the responsiveness and effectiveness of public institutions and at favouring the conditions for sustainable and inclusive development.

From the entry into force of the Agreement on 1 March, cooperation will be strengthened in those areas which to date were not subject to the provisional application of the Agreement. The European Union stands ready and looks forward to working even more closely with Armenia on the full and effective implementation of the Agreement, in our mutual interest and to the benefit of our societies and citizens.

Continue Reading

EU Politics

Explainer: New EU strategy on adaptation to climate change

Published

on

1. What is the objective of the new EU Adaptation Strategy?

The Strategy outlines a long-term vision for the EU to become a climate-resilient society, fully adapted to the unavoidable impacts of climate change by 2050. Complementing the EU’s ambitious goal to become climate neutral by mid-century, this strategy aims to reinforce the adaptive capacity of the EU and the world and minimise vulnerability to the impacts of climate change, in line with the Paris Agreement and the proposal for the European Climate Law. The new Strategy seeks to step up action across the economy and society in synergy with other Green Deal policies such as biodiversity protection and sustainable agriculture. This will be done by making adaptation smarter, swifter and more systemic, as well as stepping up international action on adaptation. This means improving our knowledge of climate impacts and adaptation solutions; stepping up adaptation planning and climate risk assessments; accelerating adaptation action; and helping to strengthen climate resilience globally. This strategy sets out a whole-economy approach, with particular consideration for those among us who are most vulnerable to guarantee that resilience is achieved in a just and fair way.

2. Why do we need a new EU Adaptation Strategy now?

Halting all greenhouse gas emissions today would still not prevent the climate change impacts that are already occurring. The severe effects of the COVID-19 pandemic on our health and socio-economic wellbeing are a stark warning of the dangers of insufficient preparation. The frequency and severity of climate and weather extremes is increasing. They range from unprecedented forest fires and heatwaves to devastating droughts; and from hurricanes ravaging EU outermost regions to forests decimated by unprecedented bark beetle outbreaks in Central and Eastern Europe. Water shortages in the EU have affected economic activities as diverse as agriculture, aquaculture, tourism, power plant cooling, and cargo shipping on rivers. In the EU, economic losses from extreme weather already average over €12 billion per year.

While the 2013 EU Adaptation Strategy was positively evaluated in 2018, there is a need to deepen and to expand adaptation actions, e.g. to make data more uniform and accessible, to bridge the climate protection gap – the share of non-insured economic losses – and to scale up finance for climate adaptation in the EU and globally. The EU’s adaptive capacity needs to be reinforced in line with the Paris Agreement and the proposed European Climate Law. The strategy comes at an important moment, ahead of the COP26 in Glasgow, where adaptation to climate change will play a key role.

3. What actions are planned in the EU as part of the strategy?

The Strategy pursues three objectives and proposes a range of actions in order to meet them:

  • To make adaptation smarter – improving knowledge and availability of data, while managing the inherent uncertainty brought upon us by climate change; securing more and better data on climate-related risk and losses, and making Climate-ADAPT the authoritative European platform for adaptation knowledge.
  • To make adaptation more systemic – supporting policy development at all levels of governance, society and the economy and in all sectors by improving adaptation strategies and plans; integrating climate resilience in macro-fiscal policy, and promoting nature-based solutions for adaptation.
  • To speed up adaptation across the board – by accelerating the development and rollout of adaptation solutions; reducing climate-related risk; closing the climate protection gap , and ensuring the availability and sustainability of fresh water.

At the same time, the Commission will continue to provide guidelines, technical capacity and funding opportunities to help Member States, regions, and local administrations to develop and implement comprehensive adaptation strategies and actions. The Commission will also continue to mainstream adaptation by integrating climate change considerations into EU policies and programmes to make them climate resilient.

4. How does the Strategy integrate international action into its framework?

Our climate change adaptation ambition must match our global leadership in climate change mitigation. The Paris Agreement established the global goal on adaptation and highlighted adaptation as a key contributor to sustainable development. Adaptation is a crosscutting element in the EU and Member States’ external action, spanning development cooperation, migration, trade, agriculture and security. The EU already has a history of cooperating with other countries on climate adaptation at all levels, but the strategy brings this into a coherent framework around three actions:

  • increasing support for international climate resilience and preparedness, for example in support of the development and implementation of Nationally Determined Contributions (under the Paris Agreement) in partner countries;
  • scaling up international finance to build climate resilience, for example through the EU instruments for external action and leveraging private sector investments;
  • strengthening global engagement and exchanges, learning from our international partners who have long been on the frontlines of climate change and have valuable experience that can help Europe become more climate resilient and sharing information for example from the COPERNICUS programme.

The EU and its Member States increased their overall climate finance support to third countries by 7.4% in 2019, amounting to €21.9 billion, 52% of which was spent on helping our partners adapt to climate change. In order to close the climate change adaptation financing gap, the Commission will aim to increase resources and mobilise larger scale adaptation finance, including through innovative mechanisms such as the European Fund for Sustainable Development Plus, as well as making resources available through bilateral channels and through the Member States.

5. Where can I find more information on adaptation in Europe?

The adaptation strategy aims to make Climate-ADAPT the authoritative European platform for adaptation knowledge, linking it up with other relevant knowledge portals and sources and making it more accessible for citizens, local governments and other stakeholders. Already today, Climate-ADAPT provides access to reliable data on the likely impacts of climate change, their socio-economic aspects, and the costs and benefits of adaptation options. Its continued development will give decision-makers vital support, and will help policy-makers at EU, national, regional and local levels to develop informed climate change adaptation measures and policies.

Climate-ADAPT will also host the new European Climate and Health Observatory. This Observatory will boost our awareness and understanding of the growing health risks, which climate change will entail, such as heat stress, food and water safety and security threats, or the emergence and spread of infectious diseases. It will help us to better anticipate and minimise these risks, and to improve our individual and collective preparedness.

6. What will Member States need to do under the new Strategy and how will progress be measured?

Adapting to climate change is a process. Discussions on standardised indicators that accurately capture progress are ongoing at EU and international level. The strategy aims to enlarge and make more accessible a toolbox that adaptation actors can use in their work and adapt to their individual needs, be they national, regional or local administrations, SMEs or individual citizens. To help informed decisions, the strategy promotes knowledge sharing and data availability. Adaptation reporting requirements for Member States are already set out in dedicated legislative instruments, such as the Energy Union Governance Regulations. The European Climate Law will, once adopted, also set out obligations for the EU and its Member States in this respect.

7. What EU-level resources are available for adaptation?

Financial support for adaptation is made available through the European Structural and Investment Funds, the Common Agricultural Policy, the LIFE Programme, and the Recovery and Resilience Facility. The proposed Horizon Europe Mission on Adaptation to Climate Change will also leverage significant resources in the effort to make Europe climate resilient. The Commission will support the local uptake of data, digital and smart solutions related to climate adaptation. To help local authorities move from planning to action, the EU will pilot a policy support facility to assist local and regional authorities under the EU Covenant of Mayors.

Continue Reading

EU Politics

Strong EU trade enforcement rules enter into force

Published

on

Robust new trade enforcement rules have entered into force that will further strengthen the EU’s toolbox in defending its interests. With the update of the EU’s Trade Enforcement Regulation, the EU is able to act in a broader range of circumstances.

The new rules upgrade the EU’s enforcement by introducing the following changes:

  • empowering the EU to act to protect its trade interests in the World Trade Organization (WTO) and under bilateral agreements when a trade dispute is blocked despite the EU’s good faith effort to follow dispute settlement procedures (the regulation previously only allowed action after the completion of dispute settlement procedures); and
  • expanding the scope of the regulation and of possible trade policy countermeasures to services and certain trade-related aspects of intellectual property rights (IPR) (the regulation previously only permitted countermeasures in goods).

Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, said: “The European Union must be able to defend itself against unfair trading practices. These new rules will help protect us from those trying to take advantage of our openness. We continue to work towards our first preference, which is a reformed and well-functioning multilateral rulebook with an effective Dispute Settlement System at its core. But we cannot afford to stand defenseless in the meantime. These measures allow us to respond resolutely and assertively.”

In line with the Political Guidelines of Commission President Ursula von der Leyen, the Commission is further reinforcing the Union’s tools to focus on compliance and enforcement of the EU’s trade agreements.

Ensuring the respect of the commitments agreed with other trade partners is a key priority of this Commission. The EU is therefore increasing the focus on enforcing its partners’ commitments in multilateral, regional and bilateral trade agreements. In so doing the Union will rely on a suite of instruments.

Background

The proposal to amend the existing Enforcement Regulation came as a reaction to the blockage of the operations of the WTO Appellate Body. The current regulation – a basis under EU law for adopting trade countermeasures – requires that a dispute goes all the way through the WTO procedures, including the appeal stage, before the Union can react. The lack of a functioning WTO Appellate Body allows WTO Members to avoid their obligations and escape a binding ruling by simply appealing a panel report.

The revised Regulation enables the EU to react even if the WTO has not delivered a final ruling because the other WTO member blocks the dispute procedure by appealing to the non-functioning Appellate Body and by not agreeing to an alternative arbitration under WTO Dispute Settlement Agreement.

This new mechanism also applies to the dispute settlement in relation to regional or bilateral trade agreements to which the EU is party if a similar blockage arises. The EU must be able to respond resolutely in case trade partners hinder effective dispute settlement resolution, for instance, by blocking the composition of panels.

Anti-coercion mechanism

As part of the agreement, the Commission committed to developing the EU’s anti-coercion mechanism swiftly. As announced in the Letter of Intent of the President of the European Commission to the President of the European Parliament and President in office of the Council of 16 September 2020 the Commission shall adopt the proposal on the anti-coercion mechanism no later than the end of 2021. The anti-coercion mechanism is also included in the European Commission’s 2021 Work Programme.

Additional efforts on implementation and enforcement

In addition to upgrading the Enforcement Regulation and to proposing an anti-coercion mechanism, several other steps have been taken since the start of this Commission to strengthen and target EU implementation and enforcement efforts. This includes:

  • the appointment of a Chief Trade Enforcement Officer;
  • the creation of a new Directorate in DG Trade for enforcement, market access and SMEs; and
  • the establishment under Access2Markets of a single entry point for complaints from EU stakeholders and businesses on trade barriers on foreign markets and violations of sustainable trade commitments in EU trade agreements.

Continue Reading

Publications

Latest

EU Politics35 mins ago

EU and Armenia Comprehensive and Enhanced Partnership Agreement enters into force

On 1 March 2021, the European Union-Armenia Comprehensive and Enhanced Partnership Agreement (CEPA) will enter into force. It has now...

Defense3 hours ago

India-Pakistan LOC peace

India and Pakistan have both announced to “strictly observe” the truce along the Line of Control and all other sectors...

Health & Wellness5 hours ago

COVID-19 cases rise for first time in seven weeks

After six consecutive weeks of decline, COVID-19 cases worldwide increased last week for the first time, the World Health Organization...

Human Rights7 hours ago

Russia responsible for Navalny poisoning, rights experts say

Russia is responsible for the poisoning and attempted killing of jailed opposition figure Alexei Navalny, two independent UN rights experts said on Monday, issuing an...

Terrorism9 hours ago

Despite acknowledging strict measures, Pakistan has to stay on the grey-list in FATF

President of The Financial Action Task Force (FATF), Dr. Marcus Pleyer, announced in a press conference held on 25 February...

Africa11 hours ago

Kenya’s Peter Mathuki appointed as Head of EAC Secretariat

Kenya’s Peter Mutuku Mathuki has been appointed to head the East African Community (EAC), the regional bloc that brings East...

Diplomacy13 hours ago

Cutting Distances with a Cricket Stump

Sports are the common threads that bind people and countries together. The interlocking rings of the Olympics rings symbolize the...

Trending