Impact of coronavirus on workers and businesses

Subject: Impact of coronavirus on workers and businesses

Following the proliferation of cases of coronavirus (Covid-19) in Italy, on Sunday 8 March Prime Minister Conte announced the government’s decision to extend restrictions on movement to the entire country.

The current health crisis is having repercussions on the international economic system and on the economy of Italy, the European country the most affected by the spread of Covid-19.

According to UNCTAD, the European Union is the economy that is the most adversely affected by the impact of coronavirus, with an estimated cost currently standing at USD 15.6 billion 1 .

Confcommercio has estimated losses of EUR 5-7 billion in Italy if the crisis lasts until May, while the Governor of the Bank of Italy has estimated a 0.2 % reduction in GDP in the space of one year 2 .

The coronavirus emergency has caused enormous damage to independent professionals, self- employed workers and small- and medium-sized enterprises (SMEs). The stricken provinces in Lombardy alone account for 12% of Italian GDP and 2% of euro zone GDP 3 .

In view of this:

1. How will the ‘Corona response investment fund’ announced by the Commission be able to provide immediate and substantial support for the independent professionals, self-employed workers and most seriously affected SMEs in Lombardy?

2. Will the Commission coordinate its action with the European Central Bank so that businesses can be funded through non-repayable grants?

1 https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2297

2 https://www.google.com/amp/amp.ilsole24ore.com/pagina/ACL6NBMB

3 https://www.google.com/amp/s/www.agi.it/economia/news/2020-02-25/coronavirus-italia-pil-crisi-recessione-

7208768/amp

Answer given by Mr Schmit on behalf of the European Commission

(5 June 2020)

Both the Coronavirus Response Investment Initiative (CRII) (4) and the Coronavirus Response Initiative Plus (CRII+) (5) aim to fight the crisis immediately, in particular by mobilising cash reserves of EUR 37 billion available under the European Structural and Investment Funds (ESI Funds) and by far-ranging measures, including through grants, to activate every euro of the EU budget to protect lives and livelihoods. (6)

They provide for more flexibility and simplification for ESI Funds. The European Social Fund can intervene against the Coronavirus outbreak, i.e. supporting access to services (7), and in some cases short term work schemes and specific schemes for the self- employed. Some operations can be activated quickly, including those for small and medium-sized enterprises and the self- employed (8). All operational programmes can also request a co-financing rate of 100%. The Lombardy region can benefit from support by the regional operational programme and by several Italian national ones.

The Commission also proposed the new European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) (9) to allow for up to EUR 100 billion in the form of loans from the Union to affected Member States. The loans will support short-time work schemes and similar measures, to help Member States protect jobs and thus employees and self- employed against the risk of unemployment and loss of income.

⋅1∙ https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2297

⋅2∙ https://www.google.com/amp/amp.ilsole24ore.com/pagina/ACL6NBMB

⋅3∙ https://www.google.com/amp/s/www.agi.it/economia/news/2020-02-25/coronavirus-italia-pil-crisi-recessione-7208768/amp

⋅4∙ Regulation (EU) n. 460/2020, adopted on 30 March 2020.

⋅5∙ Regulation (EU) n. 558/2020, adopted on 23 April 2020.

⋅6∙ An overview of the Commission’s intervention to tackle the COVID-19 emergency can be found here: https://ec.europa.eu/info/live-work-travel-

eu/health/coronavirus-response/overview-commissions-response_en

⋅7∙ Investment priority 9iv, ‘Enhancing access to affordable, sustainable and high-quality services, including healthcare and social services of general interest’.

⋅8∙ The Commission services have provided Member States with a non-exhaustive list of examples of operations ESF could support to address the crisis, such as short

time working arrangements and support for telework and IT solutions.

⋅9∙ Proposed by the Commission on 2 April 2020 (COM(2020) 139 final).


















| | )Pursuant to Article 130 of the Treaty on the Functioning of the European Union, the European Central Bank (ECB) is independent in the conduct of the monetary policy in the euro area and the Commission fully respects its independence. Therefore, the Commission does not make requests nor express opinions on the decisions of the ECB on the conduct of monetary policy.