The recommendations are structured around two objectives: in the short-term, mitigating the coronavirus pandemic’s severe negative socio-economic consequences; and in the short to medium-term, achieving sustainable and inclusive growth which facilitates the green transition and the digital transformation.

A refocused European Semester package

The Annual Sustainable Growth Strategy outlined the Commission’s growth strategy, based on promoting competitive sustainability to build an economy that works for people and the planet. With the outbreak of the coronavirus crisis this remains of utmost importance. The recommendations cover the four dimensions of competitive sustainability – stability, fairness, environmental sustainability and competitiveness – and also place a specific emphasis on health. The recommendations also reflect the Commission’s commitment to integrating the United Nations’ Sustainable Development Goals into the European Semester as they offer an integrated framework encompassing public health, social, environmental and economic concerns.

The recommendations cover areas such as investing in public health and resilience of the health sector, preserving employment through income support for affected workers, investing in people and skills, supporting the corporate sector (in particular small and medium-sized enterprises) and taking action against aggressive tax planning and money laundering. Recovery and investment must go hand-in-hand, reshaping the EU economy faced with the digital and green transitions.

The fiscal CSRs this year are qualitative, departing from the budgetary requirements that would normally apply. They reflect the activation of the general escape clause, recommending that member states take all necessary measures to effectively address the pandemic, sustain the economy and support the ensuing recovery. When economic conditions allow, fiscal policies should aim at achieving prudent medium term fiscal positions and ensuring debt sustainability, while enhancing investment.

Monitoring fiscal developments

The Commission has also adopted reports under Article 126(3) of the Treaty on the Functioning of the EU for all member states except Romania, which is already in the corrective arm of the Pact.

The Commission is required to prepare these reports for member states that are themselves planning – for reasons related to the coronavirus – or are forecast by the Commission, to breach the 3% deficit limit in 2020. The reports for France, Belgium, Cyprus, Greece, Italy and Spain also assess these Member States’ compliance with the debt criterion in 2019, based on confirmed data validated by Eurostat.

These reports take into account the negative impact of the coronavirus pandemic on national public finances. In light of the exceptional uncertainty related to the extraordinary macroeconomic and fiscal impact of the pandemic, the Commission considers that at this juncture a decision on whether to place member states under the excessive deficit procedure should not be taken.

Next steps

A coordinated European economic response is crucial to relaunch economic activity, mitigate damage to the economic and social fabric, and to reduce divergences and imbalances. The European Semester of economic and employment policy coordination therefore constitutes a crucial element of the recovery strategy.

Against this background, the Commission calls on the Council to adopt these country-specific recommendations and on member states to implement them fully and in a timely manner.

An Economy that Works for People Executive Vice-President Valdis Dombrovskis said: “The Coronavirus has hit us like an asteroid and left a crater-shaped hole in the European economy. This spring semester package has been recast and streamlined to provide guidance to our member states as they navigate their way through the storm. For this immediate phase, our focus is on investing in public health and protecting jobs and companies. As we shift to the recovery, the semester will be essential in providing a coordinated approach to put our economies back on the track to sustainable and inclusive growth – no one should be left behind. We also need reforms to improve productivity and the business environment. Once conditions allow, we will need to strike a balance between achieving fiscal sustainability while also stimulating investment.”

Jobs and Social Rights Commissioner Nicolas Schmit said: “Supporting workers, reinforcing social protection, fighting inequalities and guaranteeing people the right to develop their skills will be top priorities for our economic response to the crisis, as well as to ensure inclusive green and digital transitions. We can only achieve this together. The European Pillar of Social Rights remains our compass in these endeavours. The post-coronavirus recovery must foster resilience and upward convergence by putting people at the centre.”

Economy Commissioner Paolo Gentiloni (pictured) said: “The coronavirus pandemic and the necessary containment measures have dealt a brutal blow to Europe’s economies. These recommendations reflect that unprecedented situation. The priorities today are to strengthen our health care, support our workers, save our businesses. Yet the challenges we faced before this crisis have not gone away. So as we look to the future, our investment and reform objectives must remain focused on making a success of the green and digital transitions and ensuring social fairness. That also means everyone must pay their share: there can be no place for aggressive tax planning in a Europe of solidarity and fairness.”

Surveillance reports for Greece, Spain and Cyprus

The Commission adopted the sixth enhanced surveillance report for Greece. The report concludes that, considering the extraordinary circumstances posed by the Coronavirus outbreak, Greece has taken the necessary actions to achieve its due specific reform commitments.

The Commission has also adopted the post-programme surveillance reports for Spain and Cyprus.

More information

European Semester 2020 Spring Package: Questions and answers

Factsheet: European Semester Spring Package

Communication on the country-specific recommendations

Country-specific recommendations

Reports under Article 126(3)

Sixth enhanced surveillance report for Greece

Post-programme surveillance report for Spain

Post-programme surveillance report for Cyprus

European Semester 2020: Country reports

Spring 2020 Economic Forecast

Stability and Growth Pact

Macroeconomic imbalance procedure

The European Semester

There are tentative signs that children may not spread the novel coronavirus as much as adults, two top epidemiologists said on Tuesday, though they cautioned that the bad news was that human immunity may not last that long, writes Guy Faulconbridge.

As Europe and the United States try to get back to work after the first deadly wave of the novel coronavirus outbreak, world leaders are trying to work out when it is safe for children and students can get back to their studies.

The signs are that children may not spread it as much as adults, Dr Rosalind Eggo, who is on committees that advise the British government on its infectious disease response, told members of parliament’s upper house.

“We think that children are less likely to get it so far but it is not certain, we are very certain that children are less likely to have severe outcomes and there are hints that children are less infectious but it is not certain,” said Eggo of the London School of Hygiene & Tropical Medicine.

John Edmunds, a member of Britain’s Scientific Advisory Group for Emergencies (SAGE), told the House of Lords’ science committee that it was striking how children did not seem to play much of a role in spreading the novel coronavirus.

“It is unusual that children don’t seem to play much of a role in transmission because for most respiratory viruses and bacteria they play a central role, but in this they don’t seem to,” said Edmunds, a professor at the London School of Hygiene and Tropical Medicine.

“There is only one documented outbreak associated with a school – which is amazing,” Edmunds said.

But he added there was potentially bad news, though, that human immunity to the novel coronavirus may not last long.

The new call is the latest addition to a range of EU-funded research and innovation actions to fight the coronavirus. It complements earlier actions to develop diagnostics, treatments and vaccines by strengthening capacity to manufacture and deploying readily available solutions in order to rapidly address the pressing needs. It will also improve understanding of the behavioural and socio-economic impacts of the epidemic.

Innovation, Research, Culture, Education and Youth Commissioner Mariya said: “We are mobilising all means at our disposal to fight this pandemic with testing, treatments and prevention. But to succeed against the coronavirus, we must also understand how it impacts our society and how to best deploy these interventions rapidly. We must explore technological solutions to manufacture medical equipment and supplies faster, to monitor and prevent the spread of the disease, and to better care for patients.”

Internal Market Commissioner Thierry Breton added: “We are supporting the health authorities, healthcare professionals and the general public in all member states in tackling the coronavirus crisis. To this end, we are deploying innovative technologies and tools that can quickly be used to prevent, optimally treat, and recover from this pandemic and prepare for its aftermath. These include digital solutions and technologies such as telemedicine, data, AI, robotics, and photonics.”

The projects funded under this call should repurpose manufacturing for rapid production of vital medical supplies and equipment needed for testing, treatment and prevention, as well as develop medical technologies and digital tools to improve detection, surveillance and patients care. New research will learn from large groups of patients (cohorts) across Europe and better understanding of the behavioural and socio-economic impacts of the coronavirus epidemic could help improve treatment and prevention strategies.

The deadline for submission is 11 June 2020, while the call will focus on delivering results quickly. Europe, and the world at large, urgently need innovative solutions to contain and mitigate the outbreak, and to better care for patients, survivors, vulnerable groups, frontline health care staff and their communities. This is why the Commission aims to enable research work to start as quickly as possible through shorter timelines for the preparation of expressions of interest and for their evaluation.

The new solutions need to be available and affordable for all, in line with the principles of the Coronavirus Global Response. For this purpose, the Commission will include rapid data-sharing clauses in grant agreements, resulting from this new call, to ensure that findings and outcomes can be put to use immediately.

Background

This new special call under Horizon 2020 complements earlier actions to support 18 projects with €48.2m to develop diagnostics, treatments, vaccines and preparedness for epidemics, as well as the €117m invested in 8 projects on diagnostics and treatments through the Innovative Medicines Initiative, and measures to support innovative ideas through the European Innovation Council. It implements Action 3 of the ERAvsCorona Action Plan, a working document resulting from dialogues between the Commission services and national institutions.

The new call will cover five areas with the following indicative budgets:

1.     Repurposing of manufacturing for vital medical supplies and equipment (€23 million)
2.     Medical technologies, Digital tools and Artificial Intelligence analytics to improve surveillance and care at high Technology Readiness Levels (€56 million)
3.     Behavioural, social and economic impacts of the outbreak responses (€20 million)
4.     Pan-European COVID-19 cohorts (€20 million)
5.     Collaboration of existing EU and international cohorts of relevance to COVID-19 (€3 million)

Cohort studies typically observe large groups of individuals, recording their exposure to certain risk factors to find clues as to the possible causes of disease. They can be prospective studies and gather data going forward, or retrospective cohort studies, which look at data already collected.

More information

 

Closing in on a deal after two months of often bitter talks, the European Union’s biggest powers proposed a fund on Monday that would offer non-repayable grants to EU regions and sectors hit hardest by the pandemic, with the cash borrowed by the bloc as a whole rather than by individual member states.

Although the plan still requires the consent of all EU members, it would be a big step towards debt mutualisation, once a taboo for German governments fearing that their taxpayers might be liable for the fiscal irresponsibility of others.

“The Franco-German proposals are ambitious, targeted and, of course, welcome,” Lagarde said in a joint interview with four European newspapers, after announcement of the plan sent the euro higher and reduced Italian bond yields.

“They pave the way for the European Commission to borrow funds over the long term and, above all, they allow a substantial amount of direct support to be provided to the countries most affected by the crisis,” Lagarde told newspapers Les Echos, Handelsblatt, Corriere della Sera and El Mundo.

Buying 1.1 trillion euros of debt this year, the ECB would be expected to buy any bonds jointly issued by EU members, keeping borrowing costs down and increasing the pool of coveted safe assets.

The euro zone economy is expected to shrink by a tenth this year, and even with many coronavirus restrictions already lifted, the recovery is expected to last well beyond this year.

Reflecting on a recent German Constitutional Court ruling that the ECB exceeded its powers with sovereign bond buys, Lagarde said the German central bank is under obligation to carry out the ECB’s decision.

“According to the Treaty, all national central banks should fully participate in the determination and implementation of monetary policy in the euro area,” she said.

Her comments may foreshadow a legal clash as the German court said the Bundesbank must quit the asset buys unless the ECB can prove they are necessary.

If the ECB fails that test, the Bundesbank is likely to face a conflict between its EU Treaty obligation and a ruling by the nation’s highest court.