Terrible economic damage in Italy caused by the coronavirus. Call for urgent intervention by the Commission to support Italian companies

Subject: Terrible economic damage in Italy caused by the coronavirus. Call for urgent intervention by the Commission to support Italian companies

In March 2020, a raft of Prime Ministerial decrees in Italy imposed severe restrictions on the free movement of persons in Italy in order to limit the extremely rapid spread of the coronavirus (Covid- 19). In compliance with these infection containment measures, companies in the tourism, recreational, sports, cultural and catering sectors, and some personal services, have had to put their activities on hold. Commercial retail companies and stallholders/street vendors selling non-essential goods are in the same situation. Owing to this forced inactivity, hundreds of thousands of SMEs, micro-enterprises and self-employed workers are suffering heavy losses in sales and revenue and fear they may go bankrupt. As a result, huge numbers of workers – both the employed and self-employed – are likely to soon find themselves unemployed. Given that the coronavirus emergency is bringing a large part of the manufacturing fabric in Italy to its knees, and that this is having a dramatic impact on workers and their families, and in view of Article 107(2)(b) TFEU, which considers state aid ‘to make good the damage caused by natural disasters or exceptional occurrences’ to be compatible with the internal market, can the Commission state:

whether it will provide any special emergency funding to support the Italian economy;

whether it will allow Italy to use state aid to support the Italian companies severely affected by the current emergency, and

whether it will allow Italy to overrun its deficit parameters in order to deal with the severe economic damage caused by the coronavirus?

Answer given by Mr Gentiloni on behalf of the European Commission

(9 October 2020)

The Commission is committed to supporting Member States’ response to the crisis by using relevant EC laws and providing funding.

In March 2020, the ‘escape clause’ under the Stability and Growth Pact was activated in agreement between the Commission and the Council. This allows Member States to undertake measures, while temporarily departing from the normal budgetary requirements.

In May, the Commission adopted a second amendment to the Temporary Framework (1) setting out additional temporary state aid measures considered compatible under Article 107(3)(b) TFEU, to support the economy by providing liquidity to citizens and companies, in particular SMEs, and thus minimising job losses.

The response also includes:

1) EUR 100 billion ‘Support to mitigate Unemployment Risks in an Emergency’ (SURE) (2);

2) Coronavirus Response Investment Initiative (CRII) (3) and CRII+ (4), mobilising EUR 37 billion within the current cohesion policy programmes and granting additional flexibility in using the funds;

3) EUR 1 billion EFSI guarantee to the European Investment Fund providing liquidity to businesses under InnovFIN SME Guarantee and COSME Loan Guarantee, mobilising EUR 8 billion.

In May 2020, the Commission President presented a recovery plan with a reinforced Multiannual Financial Framework (MFF) and a new temporary instrument Next Generation EU (NGEU). NGEU will raise money on financial markets and channel it through EU programmes and funds.

The most significant instrument is the Recovery and Resilience Facility supporting Member States’ investments and reforms aligned with the Commission’s priorities, namely the green and digital transition, and the European Semester country-specific recommendations.

⋅1∙ https://ec.europa.eu/competition/state_aid/what_is_new/sa_covid19_2nd_amendment_temporary_framework_en.pdf

⋅2∙ https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2020%3A139%3AFIN

⋅3∙ Regulation (EU) 2020/460 of the European Parliament and of the Council of 30 March 2020 amending Regulations (EU) No 1301/2013, (EU) No 1303/2013 and

(EU) No 508/2014 as regards specific measures to mobilise investments in the healthcare systems of Member States and in other sectors of their economies in response to the COVID-19 outbreak (Coronavirus Response Investment Initiative) PE/5/2020/REV/1 OJ L 99, 31.3.2020, p. 5‐8

⋅4∙ Regulation (EU) 2020/558 of the European Parliament and of the Council of 23 April 2020 amending Regulations (EU) No 1301/2013 and (EU) No 1303/2013 as

regards specific measures to provide exceptional flexibility for the use of the European Structural and Investments Funds in response to the COVID-19 outbreak PE/7/2020/REV/1 OJ L 130, 24.4.2020, p. 1‐6








| | )This ambition was confirmed by the political agreement reached by the European Council on 21 July 2020. The final programmes, their structure and budgetary envelopes are subject to the outcome of the discussions between the Parliament and the Council on the elements of the recovery package and MFF, in accordance with the respective adoption procedure.