As a response to the increasing number of cases throughout Europe and the lack of an initial coordination at both a national and supranational level, a number of measures have been introduced by the European institutions since the beginning of the week. This move is aimed at supporting and coordinating the European Union, as a whole, in a multi-sectoral approach.
Last night the European Central Bank (ECB) launched the PEPP – Pandemic Emergency Purchase Programme – with an overall envelope of €750 billion to buy up private and public sector securities, to tackle the impact of the COVID19 pandemic on the European Monetary Policy and economic stability.
The new programme, which integrates and replaces the current Asset Purchase Programme, will be more flexible, allowing fluctuations in the “distribution of the purchase flows over time” and also, if needed, targeted purchases of bonds from the most affected countries.
Therefore, a sort of quantitative easing whose deadline is set for the end of the ongoing sanitary crisis, currently identified at the end of this year.
On March 17, the members of the European Council held a videoconference focused on the spread of coronavirus and the impact on the EU, together with the other European institutions involved, including the Eurogroup. The conclusions of President Charles Michel clearly underline the Union’s commitment to undertaking all necessary measures to the impact of coronavirus on the EU. “We will do ‘whatever it takes’ and more, to restore confidence and support a rapid recovery.” Eurogroup chief Mario Centeno said.
The key point lies in the need to ensure the coordination of the Member States in the measures to be taken in the coming months, in order to overcome a situation which has been described in terms of “selfishness and lack of coordination” by the President of the European Parliament, David Sassoli.
As far as the European Commission is concerned, several measures to support the internal market and the European socio-economic environment have been identified.
From a fiscal point of view, measures have been introduced to increase flexibility in the field of State Aid, to allow governments to introduce socio-economic support, according to Article 107 TFEU. Here, the Commission is working together with the Council to achieve the wider flexibility foreseen by the European fiscal framework.
For the internal market, it is crucial that flows and trade in goods continue as seamlessly as possible. To achieve this, the Commission is working to coordinate Member States’ efforts, not only in terms of exchanges, but also in terms of supply-support policies. It is essential that the adequate supply of protective equipment and medical supplies across Europe is guaranteed. The guidelines introduced on Monday by the European Commission set out principles for an integrated approach to ensure the free circulation of essential goods such as food supplies including livestock, vital medical and protective equipment and supplies. € 10 billion euros will also be allocated to the creation of a guarantee fund within the European Investment Bank to support SMEs.
With the introduction of the new Coronavirus Response Investment Initiative, the Commission will make € 37 billion available, exploiting the resources provided by the Cohesion Policy Framework, to leverage even more funding for impacted European health systems, SMEs and labour markets. Moreover, another € 28 billion of structural funds will also be made fully available.
Yesterday, the number of victims in Europe exceeded the number in China, shifting the epicentre of the global pandemic to Europe. The impact on economies and health systems across Europe is expected to grow dramatically in the coming weeks. An even stronger coordination will be required to tackle the further spread of the virus and help countries in need.