Considerations on COM(2020)467 - Proposal to grant temporary support under Council Regulation 2020/672 to Slovenia to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak

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dossier COM(2020)467 - Proposal to grant temporary support under Council Regulation 2020/672 to Slovenia to mitigate unemployment risks in an ...
document COM(2020)467 EN
date September 25, 2020
 
table>(1)On 7 August 2020, Slovenia requested financial assistance from the Union 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.
(2)The COVID-19 outbreak and the extraordinary measures implemented by Slovenia to contain the outbreak and its socioeconomic and health-related impact are expected to have a dramatic impact on public finances. According to the Commission’s 2020 Spring forecast, Slovenia was expected to have a general government deficit and debt of 7,2 % and 83,7 % of gross domestic product (GDP) respectively by the end of 2020. According to the Commission’s 2020 Summer interim forecast, Slovenia’s GDP is projected to decrease by 7,0 % in 2020.

(3)The COVID-19 outbreak has immobilised a substantial part of the labour force in Slovenia. This has led to a sudden and severe increase in public expenditure in Slovenia in respect of short-time work schemes and similar measures, as set out in recitals (4) to (9).

(4)The ‘Act Determining the Intervention Measures on Salaries and Contributions (ZIUPPP)’ (2) and the ‘Act Determining the Intervention Measures to Contain the COVID-19 Epidemic and Mitigate its Consequences for Citizens and the Economy (ZIUZEOP)’ (3), which are referred to in Slovenia’s request of 7 August 2020, introduced a wage compensation scheme for employees who did not work (or waited for work) due to a temporary incapacity of the employers to provide work for business reasons, force majeure or quarantine. The benefit payable under the scheme is capped at 80 % of the employee’s average wage in the last three months, but is not lower than the minimum wage in Slovenia, and is conditional on the retention of the employee during the employer’s participation. The scheme was in force from 13 March 2020 to 31 May 2020. On the basis of the ‘Act Determining the Intervention Measures to Mitigate and Remedy the Consequences of the COVID-19 Epidemic (ZIUOOPE)’ (4), the scheme has since been extended with some amendments from 1 June 2020 until 31 August 2020 with a planned further extension until the end of September 2020.

(5)An exemption from the payment of social security insurance contributions for employees benefitting from the wage compensation scheme was introduced. That scheme was in force from 13 March 2020 to 31 May 2020.

(6)A short-time work scheme has been created that allows employers to temporarily introduce part-time work, whilst employees are paid a full-time salary. The employer receives a fixed-amount subsidy for each employee’s non-worked hours, which is conditional on employee retention during the employer’s participation and for one additional month. The scheme is in force from 1 June 2020 to 31 December 2020.

(7)For employees who remained in the workplace, the authorities introduced a scheme that subsidised the payment of pension and disability insurance contributions, including contributions for professional pensions. The measure was coupled with an obligation for the employer to pay a monthly crisis allowance of EUR 200 to the working employees earning a wage below three times the minimum wage. Only the part of the expenditure related to the employees who were continuously in employment until the latest available outturn data was requested by the authorities. The measure was in force from 13 March 2020 to 31 May 2020.

(8)A measure has been introduced that provides financing of social security contributions for self-employed persons, farmers and religious workers. The measure covers all social security insurance contributions for such beneficiaries who were insured and could not perform their economic activity, or could only perform part of that activity, during the epidemic. The measure was in force from 13 March 2020 to 31 May 2020.

(9)Finally, a basic-income support measure for self-employed persons, farmers and religious workers was introduced that provided support of EUR 350 in March 2020 and of EUR 700 in April and May 2020 for such beneficiaries who were insured and could not perform their economic activity, or could only perform part of that activity, during the epidemic. The measure was in force from 13 March 2020 to 31 May 2020.

(10)Slovenia fulfils the conditions for requesting financial assistance set out in Article 3 of Regulation (EU) 2020/672. Slovenia has provided the Commission with appropriate evidence that the actual and planned public expenditure has increased by EUR 1 203 670 000 as of 1 February 2020 due to the national measures taken to address the socioeconomic effects of the COVID-19 outbreak. This constitutes a sudden and severe increase because the new measures cover a significant proportion of undertakings and of the labour force in Slovenia. Slovenia intends to finance EUR 90 000 000 of the increased amount of expenditure through Union funds.

(11)The Commission has consulted Slovenia and verified the sudden and severe increase in the actual and planned public expenditure directly related to short-time work schemes and similar measures referred to in the request of 7 August 2020, in accordance with Article 6 of Regulation (EU) 2020/672.

(12)Financial assistance should therefore be provided with a view to helping Slovenia to address the socioeconomic effects of the severe economic disturbance caused by the COVID-19 outbreak. The Commission should take the decisions concerning maturities, size and release of instalments and tranches in close cooperation with national authorities.

(13)This Decision should be without prejudice to the outcome of any procedures relating to distortions of the operation of the internal market that may be undertaken, in particular under Articles 107 and 108 of the Treaty. It does not override the requirement for Member States to notify instances of potential State aid to the Commission under Article 108 of the Treaty.

(14)Slovenia should inform the Commission on a regular basis of the implementation of the planned public expenditure, in order to enable the Commission to assess the extent to which Slovenia has implemented that expenditure.

(15)The decision to provide financial assistance has been reached taking into account existing and expected needs of Slovenia, as well as requests for financial assistance pursuant to Regulation (EU) 2020/672 already submitted or planned to be submitted by other Member States, while applying the principles of equal treatment, solidarity, proportionality and transparency,