Explanatory Memorandum to COM(2020)175 - Proposal for a COUNCIL REGULATION activating the emergency support under Council Regulation 2016/369 and amending its provisions in respect of the COVID-19 outbreak - Main contents

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dossier	COM(2020)175 - Proposal for a COUNCIL REGULATION activating the emergency support under Council Regulation 2016/369 and amending its ...
source	COM(2020)175
date	02-04-2020

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

The COVID-19 pandemic is leading to an unprecedented loss of life in the European Union and causing untold hardship for the people of Europe. Member States are adopting exceptional measures restraining personal freedoms to limit the loss of lives and contain the spread of the virus. As a consequence, economic activities are disrupted causing liquidity constraints and severe deterioration of the financial situation of economic actors.

The healthcare systems of Member States are under extreme pressure by the quick spread of the virus and the high number of patients that need hospitalisation. All Member States are forced to increase the spending on their healthcare systems in order to finance the increasing needs linked to the COVID-19 pandemic while continuing to provide essential medical services to all other patients. At the same time, EU countries have to allocate human resources to identify, procure and ensure the timely supply of the much needed medical equipment and accompanying provisions.

While presently the situation in the different Member States varies, it evolves quickly showing tangibly that the European Union as a whole is concerned and that a collective, coordinated and urgent response is needed to fight the spread of the virus effectively and mitigate its impact as fast as possible. Addressing this exceptional situation effectively requires a coordinated strategy of different measures aiming in particular at preserving people’s lives, preventing and alleviating human suffering and protecting human dignity.

1. A coordinated action at EU level would make it possible to both address the current crisis and ensure a proper response in its aftermath inter alia through:

–wider and faster stock-piling and coordination of essential resource distribution across Europe;

–meeting the transport needs for protective gear to be imported from international partners as well as transport across the EU;

–transportation of patients in need to cross-border hospitals which can offer free capacity;

–cross-border cooperation to alleviate the pressure on health systems in the most affected EU regions;

–central procurement and distribution of essential medical supplies to hospitals and emergency supply of protective gear for hospital staff, such as respirators, ventilators, personal protective equipment, reusable masks, medicines, therapeutics and laboratory supplies and disinfectants;

–increasing and converting production capacities of EU enterprises to ensure rapid production and deployment of equipment and material needed to urgently address supplies shortages of essential products and medicines;

–increasing care facilities and resources, including temporary and semi-permanent field hospitals and support for reconverted facilities;

–increasing the production of testing kits and support for acquiring key basic substances;

–boosting the swift development of medication and testing methods;

–developing, purchasing and distributing testing supplies (testing kits, reagents, hardware).

The measures foreseen under the Union Civil Protection Mechanism/rescEU, the Coronavirus Response Investment Initiative to deploy European Structural and Investment Funds ¹ and other Union instruments are contributing to partly address the current public health emergency. However, the scale and scope of the challenge requires a stronger response, directed in particular to the EU healthcare sector. That is why the Commission proposes to mobilise the Emergency Support Instrument to equip the EU with a broader toolbox commensurate to the large scale of the current COVID-19 pandemic.

In view of the above, support under the Emergency Support Regulation (No 2016/369) should be activated as soon as possible. This will allow the Union to deploy measures preventing and mitigating severe consequences in one or more Member States and addressing in a coordinated manner the needs related to the COVID-19 disaster, by complementing assistance provided through other EU instruments.

The Emergency Support Regulation offers a concrete means to express solidarity at EU level by involving citizens and civil society in the fight against the crisis. On the expenditure side the instrument allows involving of NGOs as well as international organisations, regional and national authorities (e.g. health sectors). On the revenue side it foresees not only additional contributions from the Member States but also donations by individuals, foundations and even crowd funding. The Commission is looking into putting in place all necessary modalities to allow speedy collection of contributions and donations.

• Consistency with existing policy provisions in the policy area

Taking into account the above considerations, the Commission proposes to activate the emergency assistance support in accordance with Article 2 of Regulation 2016/369 and to amend some of its provisions to address the special needs of the COVID-19 outbreak. In particular, the Commission proposes:

–activation of EU support from the 1 February 2020 and for a period of two years;

–extending the scope of the eligible actions and eligible implementing partners in view of the large scope of the measures required to address the COVID–19 crisis and further defining the scope of eligible costs;

–retroactive application of the Regulation as from 1 February 2020 with eligibility of relevant actions as of that date in view of ensuring equality of treatment between the Member States;

–extended period for concluding legal commitments to ensure flexibility in the implementation of emergency support;

–possibility for the Commission to procure emergency support for the Member States to address their needs related to COVID-19 pandemic, including through joint procurement, and centralised procurement on behalf of the Member States.

The coordinated action and measures allowed under the proposed Regulation will be complementary to support provided under other EU instruments.

• Consistency with other Union policies:

The proposal to activate the Emergency Support Instrument is part of the package of EU measures to respond to the current COVID-19 pandemic. Such measures are based on a coordinated and ambitious approach to make the most effective use of available resources from the EU budget ² , including the Coronavirus Response Investment Initiative, the proposed extension of the scope of the EU Solidarity Fund to public health crises ³ , exploiting all possibilities under financial instruments and the EFSI budgetary guarantee to strengthen investment support (e.g. the Competitiveness of Small and Medium-Sized Enterprise - COSME - programme and the InnovFin SME Guarantees under the Horizon 2020 programme).

This proposal complements all the measures mentioned above.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

As specified above, the COVID-19 pandemic is a sudden and exceptional event entailing a massive and disruptive impact on the Member States’ financial, economic and health care systems. This EU action is needed to respond to the current COVID-19 crisis in a spirit of solidarity. It is therefore under Article 122(1) TFEU for the Union to adopt the envisaged measures and coordinated action aiming at tackling the encountered serious difficulties.

• Subsidiarity (for non-exclusive competence)

The activation of the Emergency Support Instrument to combat the COVID-19 within the EU is underpinned by the subsidiarity principle. Due to the global dimension of the COVID-19 pandemic, the large scale of its economic and social effects and the high strain of the health care systems in all Member States, the Union is better placed than Member States alone to address the crisis in a holistic and coordinated manner across the board.

Only a coordinated action motivated by a spirit of solidarity between Member States can ensure that the spread of COVID-19 is stopped efficiently and rapidly, the impact of the disaster is mitigated as much as possible and its aftermath is addressed to prevent its resurgence. Due to the pressing demands to mobilise resources in sufficient scale and deploy them across the EU Member States on the basis of their needs, it is necessary that the EU acts in cooperation with all Member States hit by the COVID-19 pandemic.

• Proportionality

The mobilisation and use by the EU of all resources necessary to contain the spread of the COVID-19 would significantly help to increase the actions for preserving human life, human health and dignity and to revive the Member States’ economies. Given the unprecedented consequences of the COVID-19 for all EU citizens and all sectors of the economy and considering the need for rapid and efficient action, the proposal does not go beyond what is necessary to achieve the objectives laid down in the current instrument.

• Choice of the instrument

Taking into account the dimension of the COVID-19 pandemic and of the scope of its social, economic and financial impact, the Commission deems suitable to act by way of a regulation which is of general scope and directly and immediately applicable. This would result in a swift, uniform and Union-wide financial assistance mechanism.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Stakeholder consultations

Due to the urgency to prepare the proposal so that it can be adopted on time by the Council, a stakeholder consultation could not be carried out.

• Collection and use of expertise

Not relevant.

• Impact assessment

Due to the urgent nature of the proposal, no impact assessment was carried out.

• Regulatory fitness and simplification

Not relevant.

• Fundamental rights

Not relevant.

4. BUDGETARY IMPLICATIONS

An allocation of EUR 2,7 billion is proposed for 2020 to support the financing of actions envisaged under the re-activated Emergency Support Instrument. Sources of financing are further described in the Legislative Financial Statement submitted with this proposal and reflected in the draft amending budget No. 2/2020.

Additional financing may be provided depending on the evolution of the crisis and the related needs that cannot be covered by other instruments.

5. OTHER ELEMENTS

Not relevant.