The EU measures in response to the Covid-19 crisis
With the spread of Covid-19 across Europe, the European institutions adopted measures to support the European economy against the prospect of a downturn.
The European Commission established a coordinating response team at political level, composed of the commissioners responsible for the most affected policies. In this team, Commissioner Thierry Breton is in charge of the internal market.
Following the recommendation of the Commission the EU member states agreed with the use of the general escape clause of the Stability and Growth Pact (SGP). The general escape clause will allow the European Commission and the Council to undertake the necessary measures within the framework of the SGP, while departing from the budgetary requirements that would normally apply, in order to tackle the economic consequences of the pandemic.
Recognising that the entire EU economy is experiencing a serious disturbance the European Commission has adopted a Temporary Framework to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the Covid-19 outbreak. The measures include direct grants, selective tax advantages and advance payments, state guarantees for loans taken by companies from banks, subsidised public loans to companies, safeguards for banks that channel State aid to the real economy and short-term export credit insurance.
The European Central Bank (ECB) announced a stimulus package consisting of the purchase of an extra €750 bn public and corporate bonds (Pandemic Emergency Purchase Programme - PEPP) to calm down sovereign debt markets.
In a statement on Covid-19 the G7 leaders with the EU committed to do whatever is necessary to ensure a strong global response through closer cooperation and enhanced coordination of measures.
The European Investment Bank (EIB) Group has proposed a plan to mobilise up to €40 billion of financing to bridge loans credit holidays and other measures designed to alleviate liquidity and working capital constraints for SMEs and mid-caps.
On an operational side, the EU institutions have secured their staff to work from home and the official meetings of the Commission and the Council happened remotely.
The European Parliament will have an extraordinary plenary session on Thursday 26th March. This plenary will vote on the adoption of corona virus measures. For the forthcoming weeks and months, a new meeting calendar will be adopted, which will allow for Political Group and Committee meetings by remote participation.
CECE is closely monitoring the cureent situation and will report on any upcoming updates.