Explanatory Memorandum to COM(2020)466 - Proposal to grant temporary support under Council Regulation 2020/672 to Italy to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak - Main contents
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| dossier | COM(2020)466 - Proposal to grant temporary support under Council Regulation 2020/672 to Italy to mitigate unemployment risks in an ... |
|---|---|
| source | COM(2020)466  |
| date | 24-08-2020 |
1. CONTEXTOFTHE PROPOSAL
• Reasons for and objectives of the proposal
Council Regulation 2020/672 (“SURE Regulation”) lays down the legal framework for providing Union financial assistance to Member States, which are experiencing, or are seriously threatened with, a severe economic disturbance caused by the COVID-19 outbreak. Support under SURE serves for the financing, primarily, of short-time work schemes or similar measures aimed at protecting employees and the self‐ employed and thus reducing the incidence of unemployment and loss of income, as well as for the financing, as an ancillary, of some health-related measures, in particular in the workplace.
On 7 August 2020, Italy requested Union financial assistance under the SURE Regulation. In accordance with Article 6(2) of the SURE Regulation, the Commission has consulted the Italian authorities to verify the sudden and severe increase in actual and planned expenditure directly related to short-time work schemes and similar measures and health related measures, caused by the COVID-19 pandemic. In particular, it concerns:
an extension of existing short-time work schemes (‘Cassa integrazione guadagni’). The measure covers 80 % of the usual salary of the employees, whose employment contract is maintained, of the companies completely or partially closed due to COVID-19, for a maximum of 18 weeks in the period from 23 February 2020 to 31 October 2020.
an allowance of EUR 600 for the months of March and April 2020 for self-employed persons and freelancers. Freelancers who experienced a reduction of at least 33 % of their earnings in March and April 2020 on a year-to-year basis are also entitled to a EUR 1000 allowance for May 2020. A further allowance of EUR 600 for March 2020 is granted to self-employed workers and freelancers registered with private mandatory social security institutions .
(3)
a variety of measures targeting specific professions that have been adversely impacted by the COVID-19 outbreak. This includes an allowance of EUR 600 for the month of March 2020 and of EUR 500 for the month of April 2020 for fixed-term employees in agriculture; an allowance of EUR 600 for the months of March, April and May 2020 for workers in the entertainment industry (with annual income up to EUR 50 000); an allowance of EUR 600 for the months of March, April and May 2020 for collaborators of sports associations; an allowance of EUR 600 for the months of March, April and May 2020 for on-call workers and an allowance of EUR 500 for the months of April and May 2020 for domestic workers.
(4)
two measures addressing the impact of early-childhood education services and schools closure in the form of parental leave benefits for up to 30 days in the period from 5 March 2020 to 31 August 2020 for employees or self-employed persons with children up to 12 years old (or above 12, where the child is disabled and still attending school) covering 50 % of their income, and baby-sitting vouchers for a maximum of EUR 2 000 as an alternative to parental leave benefits and valid for the same period.
additional disability leave benefits for up to 12 days in the period from 1 March 2020
to 30 April 2020 and an additional 12 days in the period from 1 May 2020 to 30 June
2020 for workers with a severe disability or with relatives with a severe disability. This is an extension of an existing scheme which entitles employees to three days of disability leave per month.
non-repayable grants for self-employed workers and individual enterprises. The amount of the grant is calculated taking into account the drop in turnover suffered in April 2020 compared to April 2019 (from a minimum amount of EUR 1 000 to a maximum of 20 % of the drop in turnover).
two health-related measures, a new temporary tax credit of 60 % of the costs of improving the safety of the workplace (up to a maximum of EUR 80 000) and a new temporary tax credit of 60 % of the costs of sanitising small businesses, professional offices, and non-profit institutions and purchasing safety equipment (up to a maximum of EUR 60 000).
Italy provided the Commission with the relevant information.
Taking into account the available evidence, the Commission proposes to the Council to adopt an Implementing Decision to grant financial assistance to Italy under the SURE Regulation in support of the above measures.
• Consistency with existing policy provisions in the policy area
The present proposal is fully consistent with Council Regulation 2020/672, under which the proposal is made.
The present proposal comes in addition to another Union law instrument to provide support to Member States in case of emergencies, namely Council Regulation (EC) No 2012/2002 of 11 November 2002 establishing the European Union Solidarity Fund (EUSF) (“Regulation (EC) No 2012/2002”). Regulation (EU) 2020/461 of the European Parliament and of the Council, which amends that instrument to extend its scope to cover major public health emergencies and to define specific operations eligible for financing, was adopted on 30 March.
• Consistency with other Union policies
The proposal is part of a range of measures developed in response to the current COVID-19 pandemic such as the “Coronavirus Response Investment Initiative”, and it complements other instruments that support employment such as the European Social Fund and the European Fund for Strategic Investments (EFSI)/InvestEU. By making use of borrowing and lending in this particular case of the COVID-19 outbreak for supporting Member States, this proposal acts as a second line of defence to finance short-time work schemes and similar measures, helping protect jobs and thus employees and self-employed against the risk of unemployment.
2. LEGALBASIS, SUBSIDIARITYAND PROPORTIONALITY
• Legal basis
The legal basis for this instrument is Council Regulation 2020/672.
• Subsidiarity (for non-exclusive competence)
The proposal follows a Member State request and shows European solidarity by providing Union financial assistance in the form of temporary loans to a Member State affected by the COVID-19 outbreak. As a second line of defence, such financial assistance supports the government’s increased public expenditure on a temporary basis in respect of short-time work
schemes and similar measures to help them protect jobs and thus employees and self-employed against the risk of unemployment and loss of income.
Such support will help the population affected and helps to mitigate the direct societal and economic impact caused by the present COVID-19 crisis.
• Proportionality
The proposal respects the proportionality principle. It does not go beyond what is necessary to achieve the objectives sought by the instrument.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER
ANDIMPACTASSESSMENTS
Stakeholder
consultations
Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the Council, a stakeholder consultation could not be carried out.
• Im pact assessment
Due to the urgent nature of the proposal, no impact assessment was carried out.
4. BUDGETARY IMPLICATIONS
The Commission should be able to contract borrowings on the financial markets with the purpose of on-lending them to the Member State requesting financial assistance under the SURE instrument.
In addition to the provision of Member State guarantees, other safeguards are built into the framework in order to ensure the financia solidity of the scheme:
• A rigorous and conservative approach to financial management;
• A construction of the portfolio of loans that limits concentration risk, annual exposure and excessive exposure to individual Member States whilst ensuring sufficient resources could be granted to Member States most in need; and
• Possibilities to roll over debt.