Explanatory Memorandum to COM(2020)439 - Proposal to grant temporary support under Council Regulation (EU) 2020/672 to Romania to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak - Main contents
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| dossier | COM(2020)439 - Proposal to grant temporary support under Council Regulation (EU) 2020/672 to Romania to mitigate unemployment risks in an ... |
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| source | COM(2020)439  |
| date | 24-08-2020 |
1. CONTEXTOFTHE PROPOSAL
• Reasons for and objectives of the proposal
Council Regulation 2020/672 (“SURE Regulation”) lays down the legal framework for providing Union financial assistance to Member States, which are experiencing, or are seriously threatened with, a severe economic disturbance caused by the COVID-19 outbreak. Support under SURE serves for the financing, primarily, of short-time work schemes or similar measures aimed at protecting employees and the self‐ employed and thus reducing the incidence of unemployment and loss of income, as well as for the financing, as an ancillary, of some health-related measures, in particular in the workplace.
On 7 August 2020, Romania requested Union financial assistance under the SURE Regulation. In accordance with Article 6(2) of the SURE Regulation, the Commission has consulted the Romanian authorities to verify the sudden and severe increase in actual and planned public expenditure incurred in the response to the COVID-19 pandemic and directly related to Romania’s short-time work schemes and similar measures, as well as health-related measures. In particular, it concerns:
a benefit to employees of employers that reduce or temporarily interrupt their activity due to the effects of the COVID-19 outbreak. The benefit is capped at 75% of their basic salary (but no more than 75% of the average gross salary in the economy) for the duration of the state of emergency.
a benefit for persons whose employment contract was suspended for at least 15 days during the state of emergency or alert, provided that their employment relationship is maintained until 31 December 2020. The benefit amounts to 41.5% of their gross basic salary (but no more than 41.5% of the average gross salary in the economy).
a short-time work scheme, under which in the event of a temporary reduction of activity caused by the state of emergency or alert the employer has the possibility to reduce the working hours of employees by up to 50%. During the period of working time reduction, affected employees would benefit from an indemnity of 75% of the difference between the gross salary for normal working time and their actual salary.
two measures for the self-employed and liberal professions: for those that stopped work entirely due to the effects of the COVID-19 outbreak, the state provides a benefit of 75% of their average gross salary. For those that reduce their working hours, the state provides a benefit of up to 41.5% of their average gross salary.
a measure providing a support allowance of 35% of the due remuneration per working day, for a maximum period of 3 months, for daily labourers who stop working as a result of the suspension of business activities due to the effects of the COVID-19 outbreak.
a bonus for additional work for the personnel of the specialty structures of the National Public Health Institute and the county public health directorates and/or the public health directorate of Bucharest which act towards coordinating and implementing the measures of prevention and limitation of events declared global public health emergency by the WHO as a result of the infections with COVID-19. The measure provides a benefit equivalent to 75% of the basic salary, for the hours worked over the normal working hours, and to 100% of the basic salary, for the
hours worked on weekends, legal holidays and other days not counted as working days.
a childcare bonus for the employees of the national system of defence, penitentiaries, public health units and other categories established through ministerial orders. The benefit is conditional on the other parent not benefitting from alternative rights that grant days off to parents for the supervision of children in the event of temporary closure of educational units.
a bonus for particular danger conditions of up to 30% of their salary for medical personnel that participate in the medical actions against COVID-19.
Romania provided the Commission with the relevant information.
Taking into account the available evidence, the Commission proposes to the Council to adopt an Implementing Decision to grant financial assistance to Romania under the SURE Regulation in support of the above measures.
• Consistency with existing policy provisions in the policy area
The present proposal is fully consistent with Council Regulation 2020/672, under which the proposal is made.
The present proposal comes in addition to another Union law instrument to provide support to Member States in case of emergencies, namely Council Regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund (EUSF) (“Regulation (EC) No 2012/2002”). Regulation (EU) 2020/461 of the European Parliament and of the Council, which amends that instrument to extend its scope to cover major public health emergencies and to define specific operations eligible for financing, was adopted on 30 March.
• Consistency with other Union policies
The proposal is part of a range of measures developed in response to the current COVID-19 pandemic such as the “Coronavirus Response Investment Initiative”, and it complements other instruments that support employment such as the European Social Fund and the European Fund for Strategic Investments (EFSI)/InvestEU. By making use of borrowing and lending in this particular case of the COVID-19 outbreak for supporting Member States, this proposal acts as a second line of defence to finance short-time work schemes and similar measures, helping protect jobs and thus employees and self-employed against the risk of unemployment.
2. LEGALBASIS, SUBSIDIARITYAND PROPORTIONALITY
• Legal basis
The legal basis for this instrument is Council Regulation 2020/672.
• Subsidiarity (for non-exclusive competence)
The proposal follows a Member State request and shows European solidarity by providing Union financial assistance in the form of temporary loans to a Member State affected by the COVID-19 outbreak. As a second line of defence, such financial assistance supports the government’s increased public expenditure on a temporary basis in respect of short-time work schemes and similar measures to help them protect jobs and thus employees and self-employed against the risk of unemployment and loss of income.
Such support will help the population affected and helps to mitigate the direct societal and economic impact caused by the present COVID-19 crisis.
• Proportionality
The proposal respects the proportionality principle. It does not go beyond what is necessary to achieve the objectives sought by the instrument.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER
ANDIMPACTASSESSMENTS
Stakeholder
consultations
Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the Council, a stakeholder consultation could not be carried out.
• Im pact assessment
Due to the urgent nature of the proposal, no mpact assessment was carried out.
4. BUDGETARY IMPLICATIONS
The Commission should be able to contract borrowings on the financial markets with the purpose of on-lending them to the Member State requesting financial assistance under the SURE instrument.
In addition to the provision of Member State guarantees, other safeguards are built into the framework in order to ensure the financia solidity of the scheme:
• A rigorous and conservative approach to financial management;
• A construction of the portfolio of loans that limits concentration risk, annual exposure and excessive exposure to individual Member States whilst ensuring sufficient resources could be granted to Member States most in need; and
• Possibilities to roll over debt.