Explanatory Memorandum to COM(2022)508 - Amendment of Implementing Decision (EU) 2020/1353 granting temporary support to Poland to mitigate unemployment risks following the COVID-19 outbreak

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dossier COM(2022)508 - Amendment of Implementing Decision (EU) 2020/1353 granting temporary support to Poland to mitigate unemployment risks ...
source COM(2022)508 EN
date 05-10-2022


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 6 August 2020, Poland requested financial assistance from the Union and on 25 September 2020, with its Implementing Decision (EU) 2020/1353, the Council granted financial assistance to Poland with a view to complementing its national efforts to address the impact of the COVID-19 outbreak and respond to the socioeconomic consequences of the outbreak for workers and the self-employed.

On 19 September 2022, Poland requested the Union to extend the list of measures in Council Implementing Decision (EU) 2020/1353.

In accordance with Article 6(2) of the SURE Regulation, the Commission has consulted the Polish authorities to verify the sudden and severe increase in actual and planned expenditure directly related to Polish labour market measures and health-related measures caused by the COVID-19 pandemic. In particular, this pertains to new measures:

(a)financing the performance of PCR diagnostic tests. The Minister of Health instructed the National Health Fund to conclude with interested laboratories contracts on performing diagnostic RT-PCR tests for SARS-CoV-2. The costs of tests were financed from the state budget and they were commensurate to the number of people applying for testing;

(b)granting additional monthly cash benefit for medical professionals and one-off additional cash benefit for other healthcare workers fighting COVID-19. The benefit was granted to persons who participated in the provision of health services and had direct contact with patients infected and suspected of being infected with SARS-CoV-2 virus in organizational units of medical entities. The Minister of Health ordered the National Health Fund to transfer to medical entities performing medical activities funds intended for granting the benefits.

Poland 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) 2020/1353.

Health-related measures, as requested by Poland on 19 September 2022, amount to EUR 1 672 546 359.

• 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 2020.

• 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.