EUU, Alm.del - 2019-20 - Bilag 467: Erklæring fra eurogruppes møde 16/3-20 vedr. COVID-19 tiltag

Europaudvalget 2019-20
EUU Alm.del Bilag 467
Offentligt

Eurogroup

Statement on COVID-19 economic policy response

16 March

Following up on the videoconference on 10 March 2020 between European Council Members, as well

as the ECB President, the Eurogroup President and the High Representative, the Eurogroup held an in-

depth discussion today, together with non-Euro Area Members, on how to respond to the

extraordinary human and economic crisis caused by the Corona virus.

The Eurogroup expressed its sympathy and solidarity with the citizens and the Member States

particularly hit by this crisis and its gratitude to those risking their own health to save lives. The

Eurogroup is following the situation very closely and is in permanent contact and coordinated to give

a strong economic policy response to the exceptional situation. Our commitments of today reflect our

strong determination to do whatever it takes to effectively address the current challenges and to

restore confidence and support a rapid recovery.

Today, we welcomed all the measures taken by Member States and by the European Commission, in

particular those taken to ensure that health systems and civil protection systems are adequately

provided for to contain and treat the disease, preserve the wellbeing of our citizens and help firms

and workers that are particularly affected.

Facing these exceptional circumstances, we agreed that an immediate, ambitious and co-ordinated

policy response is needed. We have decided to act and will respond swiftly and flexibly to

developments as they unfold. We will make use of all instruments necessary to limit the socio-

economic consequences of the COVID-19 outbreak. We have therefore put together a first set of

national and European measures while setting a framework for further actions to respond to

developments and to support the economic recovery. Preliminary estimates of the European

Commission show that total fiscal support to the economy will be very sizeable. We have, so far,

decided fiscal measures of about 1% of GDP, on average, for 2020 to support the economy, in addition

to the impact of automatic stabilisers, which should work fully. We have, so far, committed to provide

liquidity facilities of at least 10% of GDP, consisting of public guarantee schemes and deferred tax

payments. These figures could be much larger going forward.

The following measures are part of our co-ordinated responses to protect our economies.

All national authorities

will allow automatic stabilisers to function and in addition implement

all necessary measures to ensure that the economic consequences of COVID-19 are tackled

and that they do not put in danger our economic and social achievements. To the extent

required by the evolving situation in each country, they will implement temporary measures

such as:

Immediate fiscal spending targeted at

containment and treatment of the disease.

Adequate resources will be provided to our health sectors and civil protection systems;

EUU, Alm.del - 2019-20 - Bilag 467: Erklæring fra eurogruppes møde 16/3-20 vedr. COVID-19 tiltag

Liquidity support for firms

facing severe disruption and liquidity shortages, especially

SMEs and firms in severely affected sectors and regions, including transport and tourism

–

this can include tax measures, public guarantees to help companies to borrow, export

guarantees and waiving of delay penalties in public procurement contracts;

Support for affected workers

to avoid employment and income losses, including short-

term work support, extension of sick pay and unemployment benefits and deferral of

income tax payments.

2. Coordinated efforts

at the European level

will supplement national measures:

We welcome the Commission’s proposal for a

€37

billion

Corona Response Investment

Initiative

dire ted at

health care systems, SMEs, labour markets and other vulnerable

parts of our economies,

a d to ake a further € 8 illio of stru tural fu ds fully eligible

for meeting these expenditures. We agreed on the need to implement the necessary

legislative changes as quickly as possible;

We welcome the initiative of the Commission and the EIB Group to mobilise up to

€8

billion of

working capital lending for 100,000 European firms,

backed by the EU budget,

by enhancing programmes for guaranteeing bank credits to SMEs. We also support the

ongoing efforts of the Commission and the EIB Group to increase this amount to up to

€

billion, which would reach a further 150,000 firms. We also welcome the ongoing work to

make further funds available as swiftly as possible and to enhance the flexibility of the

financial instruments leveraged;

We welcome the initiative of the EIB Group to catalyse

€10

billion in additional

investments in SMEs and midcaps for their own account and to accelerate the deployment

of a other €

billion backed by the EU budget;

We invite the EIB to further

enhance and accelerate the impact of the available

resources,

including through enhanced collaboration with the National Development

Banks;

We also welcomed the

package of monetary policy measures

taken by the ECB last week

aimed at supporting liquidity and funding conditions for households, businesses and

banks, help the smooth provision of credit to the real economy, and avoid fragmentation

of euro area financial markets in order to preserve the smooth transmission of monetary

policy.

3. Beyond the immediate, targeted response, we are working on all the necessary measures, to

help the economy recover

once the coronavirus has receded. We acknowledge the need to

reflect on the resilience of our European strategic value chains to better protect Europe from

product and capital market disruptions in the future. We have already significantly

strengthened our crisis management framework, including with the establishment of the

ESM. Today we recommit to continue our work to further strengthen the architecture and

resilience to shocks of the Economic and Monetary Union.

Our shared rules will support this response. In particular, we discussed the application of the SGP,

state aid rules and prudential rules:



The economic shock of the coronavirus, with an economic contraction now expected this year,

together with the cost of our agreed measures, will have a substantial budgetary impact. The

EUU, Alm.del - 2019-20 - Bilag 467: Erklæring fra eurogruppes møde 16/3-20 vedr. COVID-19 tiltag



SGP has the flexibility needed to cater for this situation and we will make full use of this

flexibility in all member states.

Automatic stabilisers will fully play their role. This means that automatic revenue shortfalls

and unemployment benefit increases resulting from the drop in economic activity will not

affect compliance with the applicable fiscal rules, targets and requirements. In addition, we

agreed that the budgetary effects of temporary fiscal measures taken in response to COVID-

19 will be excluded when assessing compliance with the EU fiscal rules, targets and

requirements. This includes the budgetary impact of temporary and targeted measures, such

as those urgently needed to contain and treat the pandemic, ensure liquidity support to firms

and sectors, and protect jobs and incomes of affected workers. The flexibility to cater for

unusual events outside the control of government is applicable to the current situation. We

welcome the readiness of the Commission to activate the general escape clause, allowing for

further discretionary stimulus, while preserving medium-term sustainability.

We welcomed the Commission guidance on the scope for supporting firms that is available

within state aid rules in the current circumstances, together with the Commission

announcement that it has accelerated its state aid approval processes. The Commission has

announced it will approve additional measures needed to remedy this serious disturbance in

the economy, which is already the case for Italy and increasingly across the EU. Taking urgent

action and making full use of the flexibility foreseen in the state aid rules is necessary to

cushion the effect of the crisis for those companies and sectors which are affected, whilst

ensuring a consistent framework and a level playing field in the single market. The Commission

stands ready to issue a specific framework shortly.

The banking system has a key role in preventing this health emergency from turning into a

social and economic crisis for businesses and households. We therefore welcomed the

statement by the European Banking Authority that competent authorities should make full

use, where appropriate, of the flexibility embedded in existing regulation to support the

banking sector in view of the current exceptional circumstances.

In particular, we also welcomed the decisions taken by ECB Banking Supervision providing

temporary capital and operational relief to euro area banks, with a view to ensuring that

supervised banks can continue to fulfil their role in funding the real economy as the economic

effects of the coronavirus become apparent. Such flexibility is needed to avoid, as much as

possible, pro-cyclical, unintended consequences for the financial sector.

We will take whatever further coordinated and decisive policy action is necessary,

including fiscal

measures, to support growth and employment.