Implementing decision 2020/2005 - Granting of temporary support to Ireland to mitigate unemployment risks following the COVID-19 outbreak - Main contents

EN

Official Journal of the European Union

L 412/33

On 27 October 2020, Ireland 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.

The COVID-19 outbreak and the extraordinary measures implemented by Ireland 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 autumn forecast, Ireland is expected to have a general government deficit and debt of 6,8 % and 63,1 % of gross domestic product (GDP) respectively by the end of 2020 and Ireland’s GDP is projected to decrease by 2,3 % in 2020.

The COVID-19 outbreak has immobilised a substantial part of the labour force in Ireland. This has led to a sudden and severe increase in public expenditure in Ireland in respect of the Temporary Wage Subsidy Scheme as set out in recital 4.

The Emergency Measures in the Public Interest (Covid-19) Act 2020 (Article 28) ‘Covid-19: temporary wage subsidy provisions’, which is referred to in Ireland’s request of 27 October 2020, introduced a scheme that subsidises a portion of the employer wage bill in circumstances where the employer’s business has been affected by the restrictions introduced due to the COVID-19 crisis. The scheme is open to employers who retain staff on their payroll and it aims at supporting firms’ viability and preserving the relationship between the employer and employee. The scheme was in place from 26 March 2020 until 31 August 2020. Initially, until 3 May 2020, the subsidy scheme refunded employers up to a maximum of EUR 410 per week for each qualifying employee. From 4 May 2020, the subsidy payment moved to a system based on the previous net weekly pay for each employee, refunding employers between 70 % and 85 % of the employee’s net earnings, subject to a cap of EUR 350 or EUR 410 per week, depending on the salary level.

Ireland fulfils the conditions for requesting financial assistance set out in Article 3 of Regulation (EU) 2020/672. Ireland has provided the Commission with appropriate evidence that the actual public expenditure has increased by EUR 2 473 887 900 as of 1 February 2020 due to the increased amount directly related to the Temporary Wage Subsidy Scheme. This constitutes a sudden and severe increase because the new measure covers a significant proportion of undertakings and of the labour force in Ireland.

The Commission has consulted Ireland and verified the sudden and severe increase in the actual public expenditure directly related to short-time work schemes and similar measures referred to in the request of 27 October 2020, in accordance with Article 6 of Regulation (EU) 2020/672.

Financial assistance should therefore be provided with a view to helping Ireland 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.

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.

The decision to provide financial assistance has been reached taking into account existing and expected needs of Ireland, 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,