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16th March 2020
Banking & Finance Consumer, Health & Environment Covid-19 Institutional law Internal Market

Commission’s Coronavirus Response Investment Initiative

The European Commission has issued a Proposal for a Regulation on specific measures to mobilise investments in the health care systems of the Member States and in other sectors of their economies in response to the COVID-19 outbreak.

The measures proposed by the Commission aim at promoting investments by mobilising available cash reserves in the European Structural and Investments Funds, to fight the crisis immediately. The investment will be sizable and reach more than €37 billion quickly. To achieve this, the Commission proposes to the European Parliament and the Council of the EU to release about €8 billion of investment liquidity.

In order to quickly direct these €37 billion of European public investment to address the consequences of the coronavirus crisis, the Commission proposes to relinquish this year’s obligation to request refunding of unspent pre-financing for the European Regional Development Fund, the European Maritime and Fisheries Fund, the European Social Fund, and the Cohesion Fund until programme closure. In view of the average co-financing rates across Member States, the €8 billion will be able to trigger the release and use of some €29 billion of structural funding across the EU.

The proposed Regulation of the European Parliament and of the Council intends to amend Regulation 1303/2013 on Common Provisions on the European Structural and Investment Funds, Regulation 1301/2013 on the European Regional Development Fund (ERDF), and Regulation 508/2014 regarding the European Maritime and Fisheries Fund (EMFF).

Regarding the Common Provisions Regulation 1303/2013, the Commission proposes to include a list of certain programme amendments that do not require approval through a Commission decision. It also suggests to include a provision that financial instruments may provide support to small and medium-sized enterprises in the form of working capital if necessary, as a temporary measure to provide an effective response to a public health crisis. It is also proposed to make expenditure for operations for fostering crisis response capacities eligible as of 1 February 2020. Likewise, the Commission proposes to provide for non-recovery of amounts normally due in 2020 for 2014-2020 cohesion policy operational programmes under the Investment for Growth and Jobs Goal and for programmes financed from the EMFF.

Concerning the ERDF Regulation 1301/2013, the Commission proposes to make clear that the ERDF may support the financing of working capital in small and medium-sized enterprises where necessary as a temporary measure to provide an effective response to a public health crisis. Likewise, it proposes to amend this Regulation so that the ERDF investment priority to strengthen research, technological development and innovation can cover investment in products and services necessary for fostering the crisis response capacities in health services.

As for the EMFF Regulation 508/2014, the Commission proposes an amendment to make it possible for the EMFF to contribute to mutual funds which provide financial compensation to fishermen for economic losses caused by a public health crisis. It also proposes to add the possibility for the EMFF to safeguard the income of aquaculture producers by contributing to an aquaculture stock insurance covering economic losses due to a public health crisis.

Read the Proposal here.

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