European Union

Welcome to the high-level summary of Covid-19 related actions by the European Union. The details and links below have been split between “Tax Filings Affected”, “Government Employee Wages Benefits Programs” and “Government Loan Programs”; and are extracts from the more detailed information available on the websites of the European Union Praxity Participant firms’ websites, links to which are available at the bottom of this page. Praxity Participant Firms in the European Union are Albert Goodman, Forrester Boyd, Garbutt + Elliott, Mazars, PM+M Solutions for Business, Rouse Partners and Shorts

Tax Filing Affected

On 27 March 2020, the European Securities and Markets Authority (ESMA) issued a public statement where they suggested national competent authorities (NCAs) not to undertake supervisory actions against listed entities regarding: Annual financial reports referring to a year-end occurring on or after 31 December 2019 but before 1 April 2020 for a period of two months following the Transparency Directive (TD) deadline; and half-yearly financial reports referring to a reporting period ending on or after 31 December 2019 but before 1 April 2020 for a period of one month following the TD deadline. NCAs in Austria, France, Cyprus, Greece, Luxembourg, and the Netherlands adopted the aforementioned ESMA regulation. They applied forbearance powers towards issuers who need to delay publishing the financial statements beyond the statutory deadline. At the same time, issuers should keep the respective NCA and their investors informed of the delay and comply with the requirements under the EU Market Abuse Regulation (596/2014). Malta is also considering to adopt the recommendation of ESMA on the exercise of forbearance powers, for a period of two months. More generously, the United Kingdom (UK), Denmark, Latvia, Poland, allow an extra 3 months for filing the annual reports for listed entities. The new filing deadlines for listed entities in Spain will be 1 month after the end of the emergency state (i.e. after the lockdown period is over), whereas Turkey has postponed filing deadlines with 1-2 months from the original deadline. However, Belgium, Bulgaria, Croatia, Finland, Hungary, Ireland, Italy, Portugal, have acknowledged the ESMA statement, but did not grant extensions yet. Similarly, for the time being, the original filing deadlines remain unaltered in Czech Republic, Estonia, Germany, Lithuania, Norway, Romania, Slovakia, Slovenia, Sweden.

Government Employee Wages Benefits Programs

State Aide The Commission stands ready to support Member States in, promoting, in particular short-time work schemes, upskilling and reskilling programmes that have proven effective in the past. European Unemployment Reinsurance Scheme 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. Coronavirus Response Investment Initiative Moreover, the Coronavirus Response Investment Initiative will facilitate the deployment of the European Social Fund – a fund geared towards supporting workers and healthcare.

€2,4 trillion Recovery Plan Next Generation EU will raise money by temporarily lifting the own resources ceiling to 2.00% of EU Gross National Income, allowing the Commission to use its strong credit rating to borrow €750 billion on the financial markets. This additional funding will be channelled through EU programmes and repaid over a long period of time throughout future EU budgets – not before 2028 and not after 2058. To help do this in a fair and shared way, the Commission proposes a number of new own resources. In addition, in order to make funds available as soon as possible to respond to the most pressing needs, the Commission proposes to amend the current multiannual financial framework 2014-2020 to make an additional €11.5 billion in funding available already in 2020.

On 21 July 2020, the EU leaders agreed on this recovery plan and the multiannual financial framework for 2021-2027, leading the way out of the crisis and laying foundations for a modern and more sustainable Europe. The money raised for Next Generation EU will be invested across three pillars: 1. Support to Member States with investments and reforms:

  • A new Recovery and Resilience Facility of €560 billion will offer financial support for investments and reforms, including in relation to the green and digital transitions and the resilience of national economies, linking these to the EU priorities. This facility will be embedded in the European Semester. It will be equipped with a grant facility of up to €310 billion and will be able to make up to €250 billion available in loans. Support will be available to all Member States but concentrated on the most affected and where resilience needs are the greatest.
  • A €55 billion top-up of the current cohesion policy programmes between now and 2022 under the new REACT-EU initiative to be allocated based on the severity of the socio-economic impacts of the crisis, including the level of youth unemployment and the relative prosperity of Member States.
  • A proposal to strenghten the Just Transition Fund up to €40 billion, toassist Member States in accelerating the transition towards climate neutrality.
  • A €15 billion reinforcement for theEuropean Agricultural Fund for Rural Development to support rural areas in making the structural changes necessary in line with the European Green Deal and achieving the ambitious targets in line with the new biodiversity and Farm to Fork strategies.
  • As of September 17th, The European Commission has set out strategic guidance for the implementation of the Recovery and Resilience Facility in its 2021 Annual Sustainable Growth Strategy (ASGS). The Facility is the key recovery instrument at the heart of NextGenerationEU which will help the EU emerge stronger and more resilient from the current crisis. The Facility will provide an unprecedented €672.5 billion of loans and grants in frontloaded financial support for the crucial first years of the recovery.

2. Kick-starting the EU economy by incentivising private investments:

  • A new Solvency Support Instrument will mobilise private resources to urgently support viable European companies in the sectors, regions and countries most affected. It can be operational from 2020 and will have a budget of €31 billion, aiming to unlock €300 billion in solvency support for companies from all economic sectors and prepare them for a cleaner, digital and resilient future.
  • Upgrade InvestEU, Europe's flagship investment programme, to a level of €15.3 billion to mobilise private investment in projects across the Union.
  • A new Strategic Investment Facility built into InvestEU– to generate investments of up to €150 billion in boosting the resilience of strategic sectors, notably those linked to the green and digital transition, and key value chains in the internal market, thanks to a contribution of €15 billion from Next Generation EU.

3. Addressing the lessons of the crisis:

  • A new Health Programme, EU4Health, to strengthen health security and prepare for future health crises with a budget of €9.4 billion.
  • A €2 billion reinforcement of rescEU, the Union's Civil Protection Mechanism, which will be expanded and strenghetend to equip the Union to prepare for and respond to future crises.
  • An amount of EUR€94.4 billion forHorizon Europe, which will be reinforced to fund vital research in health, resilience and the green and digital transitions.
  • Supporting Europe's global partners through an additional €16.5 billion for external action, including humanitarian aid.
  • Other EU programmes will be strengthened to align the future financial framework fully with recovery needs and strategic priorities. Other instruments will be reinforced to make the EU budget more flexible and responsive. See government site for more details. The European Globalisation Adjustment Fund Mobilised for purposes such as 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.

Support to mitigate Unemployment Risks in an Emergency (SURE) The Commission has proposed a new instrument for temporary Support to mitigate Unemployment Risks in an Emergency (SURE). It will allow for a financial assistance up to EUR 100 billion in the form of loans from the EU to affected Member States. The SURE instrument will be available to Member States that need to mobilize significant financial means to fight the negative economic and social consequences of the coronavirus outbreak on their territory. It will provide financial assistance to Member States to address sudden increases in public expenditure for the preservation of employment. Specifically, the SURE instrument will act as a second line of defense, supporting short-time work schemes and similar measures, to help Member States protect jobs and thus employees and self-employed against the risk of unemployment and loss of income.

On 28 September, the European Commission welcomed the Council’s approval to grant €87.4 billion of financial support to 16 Member States under the temporary Support mitigating Unemployment Risks in Emergency (SURE) instrument to help protect jobs and workers affected by the coronavirus pandemic. The Commission presented proposals to the Council on 24 and 25 August. SURE will provide up to €100 billion in financial support. This follows the finalisation of national approval procedures and signatures by all Member States to provide for the guarantee agreements with the Commission worth a total of €25 billion. The Commission has presented a proposal to the Council for a decision to grant €504 million in financial support to Hungary under the SURE instrument on 7 October. Once the Council approves this proposal, the financial support will be provided in the form of loans granted on favourable terms. See government site for more information.

Coronavirus: Commission proposes to provide €81.4 billion in financial support for 15 Member States under SURE The European Commission has presented proposals to the Council for decisions to grant financial support of €81.4 billion to 15 Member States under the SURE instrument. SURE is a crucial element of the EU's comprehensive strategy to protect citizens and mitigate the severely negative socio-economic consequences of the coronavirus pandemic. It is one of the three safety nets agreed by the European Council to shield workers, businesses and countries. See government site for the list of countries and the amount of support received.

Government Loan and Support Programs

EU Solidarity Fund

As part of the Coronavirus Response Investment Initiative, the EU Solidarity Fund’s scope has been broadened to include major health emergencies. In particular, it will provide financial aid of up to €800 million to the worst affected countries in this extraordinary situation, alleviating the burden of the immediate response measures, including assistance to the population, medical assistance and equipment, support to vulnerable groups, and measures to contain the spreading of the disease, strengthening preparedness and communication. A EU or accession country is eligible to apply for the funding if its public financial burden for those measures exceeds the threshold of €1.5 billion (2011 prices), or 0.3 % of its GNI. If mobilised, the Fund’s contribution will be between 2.5% and 6% of the total expenditure, depending on magnitude. Any application has to reach the Commission within 12 weeks of the date of the first official action against the emergency. However, in order to ensure an equitable treatment of all COVID-19 applications, the Commission will accept receiving updates/full information within 12 weeks of the entry into force of the amended Regulation i.e. by 24 June 2020. There will be no “first come first served”. A mandatory and simplified form has been prepared specifically for such applications. This will ensure comparability of applications and speed up their processing. See government site here for further details. 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. State aid: Commission approves Irish loan guarantee scheme mobilising €2 billion support for companies affected by the coronavirus outbreak The support will take the form of State guarantees on new loans provided by financial intermediaries to companies with up to 499 employees. The measure aims at enhancing access to external financing for these companies, thus helping them ensure the continuation of their activities. See government site for more details. State aid: Commission approves €2 billion Italian guarantee scheme to support trade credit insurance market in the context of the coronavirus outbreak Italy notified to the Commission a State guarantee scheme for the reinsurance of trade credit risks to support companies affected by the coronavirus outbreak. The scheme will be administered by SACE, the Italian Export Credit Agency. Trade credit insurance protects companies supplying goods and services against the risk of nonpayment by their clients. Given the economic impact of the coronavirus outbreak, the risk of insurers not being willing to issue this insurance has become higher. The Italian scheme, with an estimated budget of €2 billion, will ensure that trade credit insurance continues to be available to all companies, avoiding the need for buyers of goods or services to pay in advance, therefore reducing their immediate liquidity needs. On 30 September, the EIB Group consisting of the European Investment Fund and the European Investment Bank agreed with Commerzbank on a new favourable lending scheme, providing up to €500 million to German small and medium enterprises. The financing aims to mitigate the impact of the crisis on smaller businesses, and will allow smaller and mid-cap companies as well as self-employed individuals to continue to operate. The transaction benefits from the support of the European Fund for Strategic Investments, the central pillar of the Investment Plan for Europe, in which EIB Group and the European Commission are strategic partners to strengthen the competitiveness of the European economy. On 6 October, the European Investment Fund and Raiffeisenbank signed a €10 million guarantee agreement to support small and medium private and public enterprises in the culture and creative sectors in Bulgaria. The agreement provides loans with better terms and conditions to small and medium enterprises affected by the coronavirus crisis, helping then to sustain jobs. The agreement is backed by the Commission's Cultural and Creative Sectors Guarantee Facility, and also supported by the European Fund for Strategic Investments

Team Europe: The European Union disburses €25 million to mitigate the effects of the coronavirus crisis in The Gambia - As part of the Team Europe global package, these funds contribute to the recovery from the pandemic and also support the transition towards democracy and medium-term development objectives. European Commission issues first emission of EU SURE social bonds - The European Commission issued a €17 billion inaugural social bond under the EU SURE instrument to help protect jobs and keep people in work. The issuing consisted of two bonds, with €10 billion due for repayment in October 2030 and €7 billion due for repayment in 2040. There was very strong investor interest in this highly rated instrument, and the bonds were more than 13 times oversubscribed, resulting in favourable pricing terms for both bonds. See government site for more details.

The European Commission has approved, under EU State aid rules, a Dutch scheme of around €1.5 billion - to compensate companies providing regional and long-distance public passenger transport services in the Netherlands for the damage suffered due to the coronavirus outbreak and the emergency containment measures introduced in the Netherlands to limit the spread of the virus. EU budget: European Commission welcomes agreement on €1.8 trillion package to help build greener, more digital and more resilient Europe - The European Commission has today welcomed the agreement between the European Parliament and EU Member States in the Council on Europe's next long-term budget and NextGenerationEU, the temporary recovery instrument. Once adopted, the package of a total of €1.8 trillion will be the largest package ever financed through the EU budget. It will help rebuild a post-COVID-19 Europe, which will be greener, more digital, more resilient and better fit for the current and forthcoming challenges.

Commission disburses €14 billion under SURE to nine Member States The European Commission has disbursed €14 billion to Croatia, Cyprus, Greece, Italy, Latvia, Lithuania, Malta, Slovenia and Spain in the second instalment of financial support under the SURE instrument. See FAQ for more information. The European Commission has approved a €625 million Italian scheme to support tour operators and travel agencies in Italy affected by the coronavirus outbreak. Italy notified to the Commission, under the State aid Temporary Framework, a scheme consisting in direct grants equal to a percentage (between 5% and 20%) of the difference between (i) the amounts of turnover and fees registered from 23 February 2020 to 31 July 2020 and (ii) the amount of turnover and fees for the corresponding period of 2019. State aid: Commission gives green light to the Pan-European Guarantee Fund to enable up to €200 billion financing for companies affected by the coronavirus outbreak in 21 Member States* The European Commission found the creation of a €25 billion Pan-European Guarantee Fund managed by the European Investment Bank (EIB) to support companies affected by the coronavirus outbreak to be in line with EU State aid rules. The Fund is expected to mobilise up to €200 billion of additional financing to support mainly small and medium-size enterprises (SMEs) affected by the outbreak in the 21 participating Member States. State aid: Commission approves €300 million German aid scheme to support transition to sustainable local public transport The European Commission has approved, under EU State aid rules, a €300 million German scheme to support innovative projects aimed at strengthening sustainable local public transport through investment and innovation. The scheme will contribute to the achievement of the EU's environmental and climate goals, without unduly distorting competition. State aid: Commission approves €202 million Croatian scheme to support companies in the tourism and sports sectors in the context of coronavirus outbreak The European Commission has approved an approximately €202 million (HRK 1.525 billion) Croatian State aid scheme to support companies of all sizes active in the sports and tourism sectors (and in directly related ones, such as accommodations, restaurants) and , affected by the coronavirus outbreak. The scheme was approved under the State aid See more state aid programs issued at: https://ec.europa.eu/commission/presscorner/home/en?pagenumber=1#news-block

To find more information on other countries

The information contained herein on Covid-19 government measures within the G8, consists solely of information that can be found on the websites of one or more Praxity Participant firms, and has not been written, modified or verified by Praxity, it’s staff, officers or directors.