Economic Recovery Plans
This week we compare articles from the Netherlands, Spain, Italy and Greece to see how Europe is relying on different measures to weather the economic shocks of COVID-19.
The Eurogroup Goes Dutch
After tenuous meetings this week, eurozone ministers were able to have an agreement on the table late Thursday night. De Telegraaf reports that the deal does not include the infamous Eurobonds, which the Dutch have been adamantly opposed to, and has strict conditions for Member States that want to use the European Emergency Fund. The 540 billion fund aligns well with the Dutch stance since talks had begun earlier this week. The Dutch Finance Minister Wopke Hoekstra is pleased with the outcome, which he labeled as sensible and reasonable for the Dutch people to be part of. The European Stability Mechanism will provide financial support to countries - with no strings attached if used for medical expenses. Ministers also agreed on extra financing through the European Investment Bank for companies and entrepreneurs and for the labour market through the Multiannual Financial Framework. Minister Hoekstra ended his statement by saying that it was a sensible sign of European solidarity. The deal will now need to be signed off by the European Council.
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Taking it Slowly
CNN Español looks into the recommendations from different countries on how to restart the economy and reopen businesses once lockdown measures start to be lifted. According to the article, Austria is the first European country planning to open warehouses after Easter. Meanwhile, a group of economists, lawyers and medical experts in Germany recommend a gradual recovery of Europe's largest economy, where only the most relevant industries, such as telecommunications and the automobile industry, should be allowed to resume their activities at first. According to the report, a vaccine or treatment for the Coronavirus will probably not be available before 2021. Countries such as Germany should therefore focus more on long-run measures that can be maintained for the necessary periods of time. While the report also predicts a huge impact on Germany’s GDP this year if the lockdown lasts three months, the experts recommend that remote work should continue for longer, if possible, but that daycare facilities and schools should open sooner. On the other hand, night clubs should remain closed and big events are to be postponed.
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#EUSolidarity in Action
La Repubblica highlights how many companies are offering their support to Italian health workers and Italy through large donations of supplies and money. The list is long and growing including companies such as Bank of Italy, Apple, Unipol, Pirelli, Ferrero, Della Valle. The Della Valle family has set up a fund of 5 million euros for the family of healthcare workers who have lost their lives that is open to contributions from the public. Other initiatives have been targeted at workers who may not be able to work from home, such as Lavazza who introduced a bonus of 250 euros for the months of March and April and Chanel who has guaranteed full salary. Edison is supporting the building of a new hospital in Fiera Milano while also postponing the payment of bills of customers experiencing economic difficulties. The range is large with big and small companies, national and international corporations all stepping up to help during the crisis. There seems to be no area or person these initiatives do not touch from factory workers, healthcare workers, to those who can not leave their home to get groceries, to families, to scientific research, and the list goes on.
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Greek Take on State Aid
Ta Nea ran an article this week on the aid scheme proposed by the Greek government under the provisional framework for state aid approved by the Commission in March. The scheme foresees 1 billion euros to be disbursed to companies facing temporary financial difficulties because of the Coronavirus outbreak. According to Commission Vice-President Margrethe Vestager, the liquidity-boosting measures will allow Greek businesses to continue their economic activity during and after the crisis. While the Greek measures are not entirely in line with the conditions set out in the Commission’s interim framework, they were deemed necessary and proportionate. The interim framework allows Member States to make full use of the flexibility provided by the rules for state aid in order to support their economy. Under the framework, countries can provide grants and loans, defer payment of taxes, support areas of research and development, as well as implement other measures aiming to mitigate the socioeconomic implications of COVID-19.
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