Explanatory Memorandum to COM(2020)471 - Proposal to grant temporary support under Council Regulation (EU) 2020/672 to Belgium to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak - Main contents
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| dossier | COM(2020)471 - Proposal to grant temporary support under Council Regulation (EU) 2020/672 to Belgium to mitigate unemployment risks in an ... |
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| source | COM(2020)471  |
| 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, Belgium requested Union financial assistance under the SURE Regulation. In accordance with Article 6(2) of the SURE Regulation, the Commission has consulted the Belgian authorities to verify the sudden and severe increase in actual and planned expenditure directly related to the temporary unemployment scheme, the COVID-19 replacement income for self-employed, the COVID-19 parental leave, a number of regional income support schemes and regional health-related measures caused by the COVID-19 pandemic. In particular, it concerns:
(1) the temporary unemployment scheme, “chômage temporaire/ tijdelijke werkloosheid”, which provides compensation for employees whose work is reduced or suspended because of a decreased workload or the social distancing measures imposed by the government. The temporary unemployment scheme existed before the COVID-19 pandemic, but the requirements to access the scheme were adapted to COVID-19 and the application procedure was further eased. Furthermore, the allowance for temporary unemployment was increased from 65% to 70% of the daily average wage (capped at EUR 2 754,76 gross per month). In addition, a daily premium of EUR 5,36 was introduced.
the existing replacement income for self-employed, “bridging right” (“Droit passerelle/ Overbruggingsrecht”), which has been extended by the introduction of a “COVID-19 bridging right”. This is a benefit provided where social distancing measures imposed by the government lead to a total or partial interruption of self-employment activities or to a voluntary interruption of at least seven consecutive calendar days during the month. Starting from June 2020, the allowance targets self-employed persons who have restarted their activity but still face a reduction in turnover compared to 2019. Self-employed persons who cannot yet restart their activity can still benefit from the allowance but have to prove that this is due to COVID-19 restrictions.
the COVID-19 parental leave, which is a special parental leave that does not affect the right to the regular parental leave and allows parents to take leave to provide additional care of their children between May and September 2020 with a higher allowance than under regular parental leave.
a number of regional schemes that provide income support to the self-employed, one-person companies and other types of employees, who do not qualify for other kinds of income support. In particular, the compensation premia for companies and for entrepreneurs in Brussels Capital, the nuisance, compensation and support premia in Flanders and the compensation premium for business closure in Wallonia provide generalised one-off support for companies and self-employed that needed to close
their activities due to COVID-19 or faced a substantial reduction in turnover. Other measures (the compensation premium for intermittent workers in Brussels Capital, the nurseries subvention and the cultural operators subvention in the French Community, the training activities in Wallonia, and the cultural operators and self-employed subvention and the touristic operators subvention in the German-speaking Community) target the self-employed and workers with no access to the temporary unemployment scheme in specific sectors (cultural and care sector, training activities).
health-related measures in the German-speaking Community, which include hygiene
training, the provision of protective material for residential and care centres, hospitals and medical service providers and information campaigns.
Belgium 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 Belgium 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 impact 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.