The European Economic and Social Committee (EESC) backs up the Coronavirus Response Investment Initiative of the European Commission. The initiative is aimed at promoting investment in the healthcare systems of the European Member States and other sectors of their economies in response to the COVID-19 pandemic. To this end, the EU would mobilise cash reserves, i.e. unspent pre-financing for EU funds, and provide financial support.
At the same time, the Committee stresses the need for the European Parliament and the Council to approve the initiative swiftly so that funds can become available as quickly as possible and calls for a larger European investment plan to support the Member States in this crisis.
It is of the utmost importance that immediate support is provided for the healthcare and social systems to strengthen the relevant public services and organisation, said EESC President Luca Jahier.
What is more, we must minimise the risk of productive capital being destroyed, employees being laid off and underemployment and in-work poverty being increased. The EU has to take major steps swiftly to support and protect Member States' economies, businesses and workers, to limit the damage and support the recovery.
With regard to size of the initiative the EESC President said:
It is clear that the Coronavirus Response Investment Initiative must be just part of the support provided, specifically the ESI Funds' contribution to a larger European investment plan to support its Member States.
In a position paper on the Commission's initiative, adopted by the EESC on 25 March 2020, the Committee thus suggests that additional funding options available under the EU budget and other potential funding options be explored. Ensuring coherence and synergies with additional funding options would be important.
In the Committee's view, more attention should be paid to especially vulnerable workers and companies. It suggests amending the Commission's draft regulation in this regard.
We welcome the fact that the Commission is paying particular attention to public health systems and to small and medium-sized enterprises in its proposal. We believe, however, that not-for-profit social enterprises, civil society organisations, atypical and non-standard workers, the self-employed and precarious workers should be paid more attention, said Bernd Schlüter, rapporteur general for the EESC contribution.
These businesses and workers can be part of or even the backbone of the social and health systems and/or provide important contributions for emergency and catastrophe prevention and management. They are likely to have lower margins for cushioning the negative consequences of the pandemic and to fall outside of the usual safety nets.
The EESC believes that networking, coordination, cooperation and communication between the social, health and crisis management departments of relevant organisations, institutions and Member States at EU level should also receive more financial support.
Mr Schlüter explained:
The cross-border dimension of the coronavirus prevents any unilateral, national action from being truly effective. Coordination is therefore vital to deploy effective measures and to save the single market. This is the reason why the EESC proposes amending the Commission's draft regulation in this regard.
In its position paper, the EESC further stresses the need to provide support with maximum flexibility and minimum administrative work, without giving up the fight against corruption, illegal practices and the misuse of EU funds. Funds must be allocated quickly and fairly to be efficient. In this context, the EU should promote best practice examples from Member States. Moreover, the measures should not damage relevant ongoing projects. EU funds should always target reforms for more effective, efficient and fair social and health systems in the Member States as well as providing emergency support.
Finally, the EESC underlines the role of the European banking system and of the use of the flexibility of the European fiscal framework for coping with the shocks. It strongly supports enhanced flexibility mechanisms within the Multiannual Financial Framework (MFF) of the EU. A more agile MFF can provide financial resources to counter the shocks. In this context, the Committee calls for a swift adoption of the next MFF for 2021-2027, which is currently under negotiation.
In a declaration issued earlier this month the EESC already stated that
heads of State and government must finally act to adopt an ambitious MFF, which has to be coherent with the expectations of citizens, with the political guidelines of the European Commission and with the engagements of EU Council and Parliament, but also adapted to this unprecedented systemic crisis.
Read the full text of the EESC position.
The European Commission proposes a Coronavirus Response Investment Initiative directed at promoting investments by mobilising available cash reserves in the European Structural and Investments Funds, to fight the crisis immediately. The investment will be sizeable and reach more than €37 billion quickly. To achieve this, the Commission proposes to the European Parliament and the Council 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 (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF) and the European Maritime and Fisheries Fund (EMFF) until programme closure.
The Member States shall use the amounts not recovered in 2020 to accelerate investments related to the COVID-19 outbreak under the ERDF and the ESF, the CF and the EMFF. 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 is one of the emergency aid measures tabled by the European Commission that will be voted on by the European Parliament during its extraordinary plenary session on 26 March 2020.