The European Commission has approved a €800,000 Latvian scheme to support tour operators that bore the costs of the repatriation of travellers in the context of the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020 and 8 May 2020. The public support, which will take the form ofdirect grants, is intended to cover the financial costs incurred by those operators for the repatriation to Latvia of travellers who were on holiday abroad in the course of the outbreak. The aid will be channelled through the Latvian Consumer Rights Protection Centre. The purpose of the scheme is to mitigate the liquidity shortages that tour operators had to face due to the costs incurred to repatriate travellers and to help them progressively resume their activities during and after the outbreak. The Commission found that the Latvian measure is in line with the conditions set out in the Temporary Framework. In particular, (i) the support per company will not exceed the limits as set out in the Temporary Framework; and (ii) the scheme will run until 31 December 2020. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.57423 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.
The EU expresses its grave concern at the steps taken by China on 28 May, which are not in conformity with its international commitments (Sino-British Joint Declaration of 1984) and the Hong Kong Basic Law. This risks to seriously undermine the ‘One Country Two Systems’ principle and the high degree of autonomy of the Special Administrative Region of Hong Kong.
EU relations with China are based on mutual respect and trust. This decision further calls into question China’s will to uphold its international commitments. We will raise the issue in our continuing dialogue with China.
Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, together with President of Serbia Aleksandar Vučić participated today in the virtual signing ceremony of a €70.2 million assistance programme by Serbian Minister of European integration Jadranka Joksimović and EU Head of Delegation to Serbia Sem Fabrizi. This programme is the first envelope of the EU’s Instrument for Pre-Accession (IPA) 2020. It will support alignment to the EU acquis, socio-economic development and employment, and social policies for the most vulnerable people. In particular, €30 million will be devoted to the economic recovery with grant support provided to micro enterprises, start-ups and business support organisations in the less developed regions of Serbia; therefore increasing employment, innovation and economic development at local level. In the aftermath of the covid-19 crisis, special focus will also be put on strengthening the capacities for surveillance and response to communicable diseases. The signing ceremony was followed by a press point by the Commissioner and the President (available on EbS).
The EU has mobilised €3 million in emergency assistance to countries in East Africa that have been hit by heavy rainfall over the past weeks, triggering devastating landslides and floods. “In a region that is already battling the effects of a serious locust infestation and the coronavirus pandemic, these floods are adding to the hardships experienced by many vulnerable communities. EU aid will get essentials to those most in need”, said Commissioner for Crisis Management, Janez Lenarčič. Funding will be supporting aid organisations in Ethiopia (€850,000), Kenya (€500,000), Somalia (€1.4 million) and Uganda(€250,000) and provide shelter material, clean water, food, hygiene kits and access to basic health assistance. More than 900,000 people have had to seek shelter elsewhere because of the floods in these four countries alone. The EU is already supporting humanitarian projects helping the most vulnerable people in the region affected by conflict, food insecurity, epidemics and natural disasters.
The Council adopted conclusions reaffirming the EU’s political commitment to support the people of Afghanistan on their path towards peace, security, stability, democracy, prosperity and self-reliance. The EU will condition its future political and financial support to ensure that the republican, democratic and values-based principles are protected and further promoted. The conclusions also reiterate the EU’s support for a negotiated political settlement leading to lasting peace and reconciliation, which must build on the democratic and human rights achievements of the past 19 years.
In its conclusions, the Council calls on the Taliban to build trust and confidence allowing the prompt start of intra-Afghan negotiations on the basis of the sufficient numbers of prisoners already released. The Taliban should respect both the spirit and letter of their bilateral Agreement with the government of the United States signed in Doha on 29 February 2020. In this regard, the EU strongly condemns attacks on humanitarian and medical personnel and facilities, including the horrific attack at the Dasht-e-Barchi hospital in Kabul of 12 May.
The EU, in line with the appeal made by the Secretary General of the United Nations on 23 March 2020, calls for an immediate humanitarian ceasefire to focus efforts on tackling the COVID-19 pandemic and to save lives on all sides. All political actors in Afghanistan should contribute to mitigate the fallout of the COVID-19 pandemic, and cooperate to create an overall context to tackle it.
The conclusions stress that the EU stands ready to provide political and financial support for the people of Afghanistan by:
(1) supporting the Geneva Ministerial Pledging Conference
(2) strengthening EU assistance for tackling the COVID-19 pandemic
(3) using all instruments available in full cooperation and complementarity with the UN, NATO and regional partners, to contribute to the stabilisation of the country
(4) supporting institutional reform and capacity-building, including in the sectors of security and defence, based on the principles of democratic governance and on human rights
(5) assisting with the reintegration of former fighters as well as their families, the victims of conflict and the most vulnerable, including through specialised child protection programmes
(6) Promoting regional cooperation, stability, peace, trade and sustainable connectivity in line with “Connecting Europe and Asia – Building blocks for an EU Strategy” as adopted by the Foreign Affairs Council in October 2018
Focussing on future generations, Commission President von der Leyen discussed the €750 billion recovery instrument within a revamped long-term EU budget in plenary.
Following the presentation by Commission President Ursula von der Leyen and the pledge by the Croatian Council representative Nikolina Brnjac to work with member states to swiftly conclude negotiations with Parliament on the new package, political group leaders took the floor to outline their initial reactions. Click on names to view the individual statements.
“European solidarity is back and we are opening a new chapter for the EU”, Manfred Weber (EPP, DE) said. The new money needs to be spent on fresh ideas and not on Europe’s old problems. “Solidarity goes hand in hand with responsibility”, therefore it must be clear how the money will be paid back, he said, calling for new own resources and for digital giants to pay their part.
Iratxe García Perez (S&D, ES) thanked von der Leyen for an ambitious proposal and for giving the EP “the role it deserves” in the design of the recovery package. Warning that the survival of the European project is at stake, she urged the Council to adopt the new MFF by qualified majority to avoid keeping the EU “hostage by four member states that prefer a national response to a European one”.
“It is a game changer, unprecedented in the history of Europe”, said Dacian Ciolos (Renew, RO). “The MFF and the recovery plan must focus on the future”, with the Green deal and digital agenda as building blocks, he said. “We may differ on some details, but I really welcome the approach”, he said, reminding member states that “the EU is not a cash machine. Solidarity comes with values”.
Jörg Meuthen (ID, DE) rejected the package proposal as “completely wrong and nonsense”, without a proper legal basis and lacking responsibility or economic sense. The Commission wants to spend money “as if there was no tomorrow”. It is a huge price for European taxpayers, he concluded.
Ska Keller (Greens/EFA, DE) urged: “We must not repeat the big mistakes of the past and force countries into austerity and blind market ideologies. Instead, we need to make sure that the money is well invested into projects that will help in the long term, create jobs and save the one planet that we have.”
Johan van Overtveldt (ECR, BE) said: “If we are going to allow loans and grants, there must be clear conditions. The money needs to go to where it is most needed, and there must be safety mechanisms in place for our businesses. People working and saving should not have to “fork out” for these programmes”.
“Instead of making a clean break with past dogmas”, the Recovery Plan stops “midstream” said Manon Aubry (GUE/NGL, FR). Welcoming the new proposals on Own Resources, she called for the crisis debt to be cancelled, for direct perpetual loans to member states, and for public support to be conditional on social considerations.
The Commission has also unveiled its adjusted Work Programme for 2020, which will prioritise the actions needed to propel Europe’s recovery and resilience.
Parliament and Council will discuss the new proposals and decide on their final shape in upcoming negotiations.
- The €750 billion borrowing plan is an important proposal for an efficient recovery
- Recovery strategy should not be financed at the expense of the MFF, MEPs said in reaction to the Commission’s long-term budget and recovery plan proposals
- Danger of weakened EU budget after recovery phase, preventing EU from investing in common future
- Parliament ready to reject any proposals that would not meet its standards
It is high time to start negotiations on the MFF with the Council without delay, said the EP’s negotiating team for the long-term EU budget and Own Resources reform.
The six members of the MFF/OR negotiating team commented on the Commission’s proposals for a revised Multiannual Financial Framework (MFF) and recovery plan presented on Wednesday in an extraordinary plenary session:
“We will carefully assess the package of proposals presented by the European Commission today. We positively acknowledge the reinforcement of the current MFF in 2020 and the significant borrowing which are much needed.
Today’s Commission proposals are an important step. We therefore regret that the Commission has reduced its original MFF proposal, thus moving further away from Parliament and closer to the European Council President’s February 2020 proposal. Once the recovery phase is behind us, this could leave us with a weakened budget that prevents the EU from investing in its common future – such as climate and digital transformation -, leaving it more vulnerable to further crises.
Parliament shares the view that the recovery plan will be channelled through the MFF and must be embedded in a reformed system of own resources. But it would be self-defeating to trade the long-term against the short-term: the recovery strategy should not be financed at the expense of the core MFF and its wider objectives, which the COVID-19 outbreak has made more relevant than ever. Furthermore, any new budgetary tool must ensure Parliament’s participation and the community method to boost democratic oversight, transparency and accountability.
We express, however, our concerns about future debt and the way it will be repaid in the future.
Parliament agrees with the general approach that the long-term repayment of the borrowing should be re-financed by new, genuine own resources in order to use European, rather than ever more national means to finance our needs and thus to avoid a new dividing line between net contributors and net recipients. We regret, however, that the Commission is only putting forward a menu of possible revenue sources rather than submitting concrete legislative initiatives for a basket of new own resources as requested by Parliament, which would also have immediate economic and policy benefits as of 2021. Parliament recalls its consent is conditional on the introduction of a basket of new own resources without further delay.
Parliament must give its consent to any new MFF, and stands ready to do so if the final agreement will include its main priorities and will genuinely provide for Parliament’s participation. We call on the Council to work constructively with Parliament on improving the Commission’s proposals.
Failing an agreement before the end of the year, 2020 ceilings would be automatically extended. That is why Parliament has formally requested that the Commission present an MFF contingency plan in order to eliminate any risk of discontinuity or disorderly extension. A contingency plan based on 2020 ceilings could indeed provide a better basis for the European Union’s recovery than a late and inadequate MFF.
Since November 2018, we have repeatedly expressed our readiness to engage with the Council on the MFF and the Own Resources, to no avail. Given how urgent this is, it is high time to start these negotiations without further delay.”
The EP’s negotiating team for the next long-term EU budget and Own Resources reform
Johan Van Overtveldt (ECR, BE), Chair of the Committee on Budgets
Jan Olbrycht (EPP, PL), MFF co-rapporteur
Margarida Marques (S&D, PT), MFF co-rapporteur
José Manuel Fernandes (EPP, PT), Own Resources co-rapporteur
Valérie Hayer (RENEW, FR), Own Resources co-rapporteur
Rasmus Andresen (Greens/EFA, DE)
- Tailor-made recovery and resilience plans
- Transformation must be social, economically fair and green
- Fighting youth unemployment a priority
On Wednesday, MEPs discussed the European Semester and economically and socially sustainable ways out of the crisis with Commissioners Dombrovskis, Gentiloni and Schmit.
Economic and Monetary Affairs Committee (ECON) MEPs stressed that in order to become a proper recovery tool, the Commission’s Country-Specific Recommendations (CSR) have to be implemented in the member states and must take into account a post-crisis reality.
Executive Vice-President Dombrovskis pointed to the resilience facility, the new recovery instrument designed to improve the implementation of the CSR. Commissioner Gentiloni explained that each country, together with the Commission, will have to prepare a tailor-made recovery and resilience plan, in which the member states’ post-crisis priorities should be ensured.
Fiscal policy in times of crisis
Other ECON MEPs were concerned about the general escape clause, which allows the excessive deficit procedure against a member state to be put on hold in times of a severe economic downturn. MEPs wanted to know when the procedure will kick in again and how to keep the right balance between debt sustainability and much-needed investments.
Mr Dombrovskis stressed that the Stability and Growth Pact has been put on hold until the economy is growing again; then the rules start to reapply. Commissioner Gentiloni called for the Council and the Parliament to come to an agreement quickly, so that funds can reach recipients on the ground and the economy can rebound.
Finally, MEPs asked about the connection between the rule of law and access to EU funds. Executive Vice-President Dombrovskis reminded MEPs that rule of law is a condition to access EU funding.
Social dimension of the recovery
Commissioner for Jobs and Social Rights Nicolas Schmit said that the latest unemployment forecast for the EU in 2020 stands at 9 % and one out of four workers is currently on a short-time work schedule. Several Members from the Employment and Social Affairs Committee (EMPL) voiced their deep concern that the unemployment level for Europe’s youth is nearly twice as high as that of all job seekers.
Commissioner Schmit underlined that fighting youth unemployment remains a priority and that the Commission will reinforce the youth guarantee to improve the prospects for young people.
The risk of creating a digital divide when demand for highly-qualified workers will increase, especially in the context of the digital and green transition, was another point of concern for MEPs, who noted that the measures in the context of the green deal could lead to job losses and exacerbate poverty and inequality.
According to Mr Dombrovksis, the green deal will actually have a positive effect on the economy and will create new jobs, with digital skills featuring prominently on the upcoming reinforced skills agenda.
Instruments for upwards social convergence
MEPs also underlined that the crisis has exposed the shortcomings of our current social model and that the European Semester has to be at the service of recovery and a transformation that is social, economically fair and green. Commissioner Schmit highlighted that the social dimension is anchored in the European Semester by means of the social scoreboard and that the Commission tackles problems related to precarious work with initiatives such as fair and predictable working conditions, proposals for an EU minimum wage, working conditions of platform workers, and a child guarantee.
A recording of the debate is available by clicking here.
The European Semester is the annual cycle for coordinating the economic and budgetary policies of the EU member states. Within the framework of the semester, the European Commission analyses the national budgets of EU countries and then issues recommendations, which the member states must take into account when drawing up their national budgets for the coming year.
In the context of the pandemic, the European Commission has adapted its recommendations: In the short-term, EU countries must focus fully on limiting the socio-economic consequences of the crisis, by safeguarding employment and businesses and through additional investments in public health. In the medium-term, the focus should be on investing in sustainable and inclusive growth that facilitates the green transition and the digital transformation.
Due to the deep uncertainty brought about by the extraordinary macroeconomic and fiscal impact of the pandemic, the Commission decided that it will not start excessive deficit procedures against member states.
Committee on Economic and Monetary Affairs on twitter
Committee on Employment and Social Affairs on twitter.
As announced by European Commission President von der Leyen on 27 May 2020, the centrepiece of the recovery plan will be a new Recovery and Resilience Facility. The aim of the facility will be to support investments and reforms essential to a lasting recovery, to improve the economic and social resilience of the Member States, and to support the green and digital transitions. It will be available to all Member States but support will be concentrated in the parts of the Union most affected and where resilience needs are greatest. This will help to counteract widening divergences between Member States and prepare our economies for the future. The Recovery and Resilience Facility will be firmly embedded in the European Semester. Member States will draw up recovery and resilience plans as part of their National Reform Programmes. The facility comes with a proposed budget of €560 billion from Next Generation EU to help fund Member States’ recovery and resilience plans. It will be equipped with a grant facility worth up to €310 billion and will be able to make up to €250 billion in loans. More information on the Facility is available in a factsheet and MEMO online. The press conference remarks of Executive Vice-President Dombrovskis are available here, and those of Commissioner Gentiloni here. You can stream the press conference on EbS.
As announced by President von der Leyen, the Commission is proposing a new REACT-EU initiative to increase cohesion support to Member States to make their economies more resilient and sustainable in the crisis repair phase. This will help to bridge the gap between first response measures and longer-term recovery. Programmes such as the European Social Fund and the Fund for European Aid for the Most Deprived can be topped-up using part of the €55 billion in fresh funding available. Beyond the immediate crisis response, cohesion policy will be crucial to ensuring a balanced recovery in the longer term, avoiding asymmetries and divergences of growth between and within Member States. The Commission is therefore also adjusting its proposals for the future cohesion and social policy programmes to give even stronger support to recovery investments, for example in the resilience of national healthcare systems, in sectors such as tourism and culture, in support for small and medium-sized enterprises, youth employment measures, education and skills, and measures combatting child poverty. The Commission is also strengthening the Just Transition Mechanism, a key element of the European Green Deal, to ensure social fairness in the transition towards a climate-neutral economy in the most vulnerable coal – and carbon-intensive regions. For more details, see the Q&A on REACT-EU, cohesion policy post-2020 and European Social Fund+; factsheets on cohesion policy and social funds; a press release on a public loan facility to support green investments together with the European Investment Bank; and a Q&A on the Just Transition Mechanism.