672 to Portugal to mitigate unemployment risks following the COVID-19 outbreak - Main contents

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dossier	COM(2022)3 - Amendment of Decision 2020/1354 granting temporary support under Regulation (EU) 2020/672 to Portugal to mitigate unemployment ...
source	COM(2022)3
date	04-01-2022

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

Council Regulation (EU) 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 25 September 2020, the Council granted financial assistance to Portugal with a view to complementing its national efforts to address the impact of the COVID-19 outbreak and respond to the socio-economic consequences of the outbreak for workers and the self-employed.

On 9 December 2021, Portugal requested the Union to extend the list of measures for which the Council granted financial assistance in Council Implementing Decision (EU) 2020/1354.

In accordance with Article 6 i of the SURE Regulation, the Commission has consulted the Portuguese authorities to verify the sudden and severe increase in actual and planned expenditure directly related to Portuguese labour market measures and health-related measures caused by the COVID-19 pandemic. In particular, these measures pertain to new measures which Portugal implemented:

(a) the extraordinary support scheme for self-employed workers, workers without access to other social protection mechanisms, and managers whose income has been particularly affected by the COVID-19 pandemic.

In the case of self-employed workers, the measure provides a benefit equal to two-thirds of the drop in the workers’ monthly income, between the monthly average according to the last quarterly income statement and the monthly average of 2019, with an upper limit of EUR 501.16. Eligible self-employed workers are those experiencing a drop in income of at least 40% in the period from March to December 2020, compared with 2019.

In the case of workers without access to other social protection mechanisms, the measure provides: (i) for employees, a benefit equal to the difference between the monthly reference value of EUR 501.16 and the average monthly wage per adult in the respective household; or, (ii) for self-employed workers, a benefit equal to two-thirds of the drop in the workers’ monthly income, between the monthly average according to the last quarterly income statement and the monthly average of 2019, with an upper limit of EUR 501.16.

In the case of managers, the measure provides a benefit equal to either their reference average monthly income when it is below 1.5 times Portugal’s social support index (EUR 438.81), or two-thirds of their reference average monthly income when it is equal or above the aforementioned index. Eligible managers are those whose business activity has been temporarily suspended due to the COVID-19 pandemic, or that are experiencing revenue losses of at least 40% in the period of 30 days preceding the request for support, compared with the same month of the previous year, or with the monthly average of the two months prior to that period.

In all cases, the benefit has a lower limit equal to EUR 50, increased to 50% of the observed monthly income drop when the latter falls between 50% and 100% of Portugal’s social support index, or EUR 219.40 when the income drop exceeds the aforementioned index.

(b) the social support scheme for artists, authors, technicians and other art professionals. The measure provides for a monthly benefit equal to Portugal’s social support index (EUR 438.81).

(c) the hiring of additional health professionals and overtime work in the National Health Service to help address pandemic-related challenges.

Portugal 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 extend the list of measures for which the Council already granted financial assistance in Council Implementing Decision (EU) 2020/1354.

Health-related measures, as requested by Portugal, including the additional health-related measures requested on 9 December 2021, amount to EUR 1 513 823 304.

• Consistency with existing policy provisions in the policy area

The present proposal is fully consistent with Council Regulation (EU) 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. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The legal basis for this instrument is Council Regulation (EU) 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 CONSULTATIONS AND IMPACT ASSESSMENTS

• 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.

• Impact 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 financial 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.