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.
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. 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. See government site for more details. See more state aid programs issued at: https://ec.europa.eu/commission/presscorner/home/en?pagenumber=1#news-block
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.