Statement on COVID-19 economic policy response

March 17, 2020

Following up on the videoconference on 10 March 2020 between European Council Members, as well as the ECB President, the Eurogroup President and the High Representative, the Eurogroup held an in-depth discussion today, together with non-Euro Area Members, on how to respond to the extraordinary human and economic crisis caused by the Corona virus.
The Eurogroup expressed its sympathy and solidarity with the citizens and the Member States particularly hit by this crisis and its gratitude to those risking their own health to save lives. The Eurogroup is following the situation very closely and is in permanent contact and coordinated to give a strong economic policy response to the exceptional situation. Our commitments of today reflect our strong determination to do whatever it takes to effectively address the current challenges and to restore confidence and support a rapid recovery.
Today, we welcomed all the measures taken by Member States and by the European Commission, in particular those taken to ensure that health systems and civil protection systems are adequately provided for to contain and treat the disease, preserve the wellbeing of our citizens and help firms and workers that are particularly affected.
Facing these exceptional circumstances, we agreed that an immediate, ambitious and co-ordinated policy response is needed. We have decided to act and will respond swiftly and flexibly to developments as they unfold. We will make use of all instruments necessary to limit the socio-economic consequences of the COVID-19 outbreak. We have therefore put together a first set of national and European measures while setting a framework for further actions to respond to developments and to support the economic recovery. Preliminary estimates of the European Commission show that total fiscal support to the economy will be very sizeable. We have, so far, decided fiscal measures of about 1% of GDP, on average, for 2020 to support the economy, in addition to the impact of automatic stabilisers, which should work fully. We have, so far, committed to provide liquidity facilities of at least 10% of GDP, consisting of public guarantee schemes and deferred tax payments. These figures could be much larger going forward.
The following measures are part of our co-ordinated responses to protect our economies.
1. All national authorities will allow automatic stabilisers to function and in addition implement all necessary measures to ensure that the economic consequences of COVID-19 are tackled and that they do not put in danger our economic and social achievements. To the extent required by the evolving situation in each country, they will implement temporary measures such as:

    • Immediate fiscal spending targeted at containment and treatment of the disease. Adequate resources will be provided to our health sectors and civil protection systems;
    • Liquidity support for firms facing severe disruption and liquidity shortages, especially SMEs and firms in severely affected sectors and regions, including transport and tourism – this can include tax measures, public guarantees to help companies to borrow, export guarantees and waiving of delay penalties in public procurement contracts;
    • Support for affected workers to avoid employment and income losses, including short-term work support, extension of sick pay and unemployment benefits and deferral of income tax payments.

2. Coordinated efforts at the European level will supplement national measures:

    • We welcome the Commission’s proposal for a €37 billion “Corona Response Investment Initiative” directed at health care systems, SMEs, labour markets and other vulnerable parts of our economies, and to make a further €28 billion of structural funds fully eligible for meeting these expenditures. We agreed on the need to implement the necessary legislative changes as quickly as possible;
    • We welcome the initiative of the Commission and the EIB Group to mobilise up to €8 billion of working capital lending for 100,000 European firms, backed by the EU budget, by enhancing programmes for guaranteeing bank credits to SMEs. We also support the ongoing efforts of the Commission and the EIB Group to increase this amount to up to €20 billion, which would reach a further 150,000 firms. We also welcome the ongoing work to make further funds available as swiftly as possible and to enhance the flexibility of the financial instruments leveraged;
    • We welcome the initiative of the EIB Group to catalyse €10 billion in additional investments in SMEs and midcaps for their own account and to accelerate the deployment of another €10 billion backed by the EU budget;
    • We invite the EIB to further enhance and accelerate the impact of the available resources, including through enhanced collaboration with the National Development Banks;
    • We also welcomed the package of monetary policy measures taken by the ECB last week aimed at supporting liquidity and funding conditions for households, businesses and banks, help the smooth provision of credit to the real economy, and avoid fragmentation of euro area financial markets in order to preserve the smooth transmission of monetary policy.

3. Beyond the immediate, targeted response, we are working on all the necessary measures, to help the economy recover once the coronavirus has receded. We acknowledge the need to reflect on the resilience of our European strategic value chains to better protect Europe from product and capital market disruptions in the future. We have already significantly strengthened our crisis management framework, including with the establishment of the ESM. Today we recommit to continue our work to further strengthen the architecture and resilience to shocks of the Economic and Monetary Union.
Our shared rules will support this response. In particular, we discussed the application of the SGP, state aid rules and prudential rules:

  • The economic shock of the coronavirus, with an economic contraction now expected this year, together with the cost of our agreed measures, will have a substantial budgetary impact. The SGP has the flexibility needed to cater for this situation and we will make full use of this flexibility in all member states.
  • Automatic stabilisers will fully play their role. This means that automatic revenue shortfalls and unemployment benefit increases resulting from the drop in economic activity will not affect compliance with the applicable fiscal rules, targets and requirements. In addition, we agreed that the budgetary effects of temporary fiscal measures taken in response to COVID-19 will be excluded when assessing compliance with the EU fiscal rules, targets and requirements. This includes the budgetary impact of temporary and targeted measures, such as those urgently needed to contain and treat the pandemic, ensure liquidity support to firms and sectors, and protect jobs and incomes of affected workers. The flexibility to cater for unusual events outside the control of government is applicable to the current situation. We welcome the readiness of the Commission to activate the general escape clause, allowing for further discretionary stimulus, while preserving medium-term sustainability.
  • We welcomed the Commission guidance on the scope for supporting firms that is available within state aid rules in the current circumstances, together with the Commission announcement that it has accelerated its state aid approval processes. The Commission has announced it will approve additional measures needed to remedy this serious disturbance in the economy, which is already the case for Italy and increasingly across the EU. Taking urgent action and making full use of the flexibility foreseen in the state aid rules is necessary to cushion the effect of the crisis for those companies and sectors which are affected, whilst ensuring a consistent framework and a level playing field in the single market. The Commission stands ready to issue a specific framework shortly.
  • The banking system has a key role in preventing this health emergency from turning into a social and economic crisis for businesses and households. We therefore welcomed the statement by the European Banking Authority that competent authorities should make full use, where appropriate, of the flexibility embedded in existing regulation to support the banking sector in view of the current exceptional circumstances.
  • In particular, we also welcomed the decisions taken by ECB Banking Supervision providing temporary capital and operational relief to euro area banks, with a view to ensuring that supervised banks can continue to fulfil their role in funding the real economy as the economic effects of the coronavirus become apparent. Such flexibility is needed to avoid, as much as possible, pro-cyclical, unintended consequences for the financial sector.

We will take whatever further coordinated and decisive policy action is necessary, including fiscal measures, to support growth and employment.

Additional Articles

Polish newspaper runs front page list on ‘how to spot a Jew’

MP says it is ‘absolute scandal’ such ‘filthy texts, as if taken from Nazi newspapers’ sold in parliament
A right-wing newspaper in Poland has published an article on its front page instructing readers on “how to recognise a Jew”.
The Tylko Polska, or “Only Poland”, ran a list of “names, anthropological features, expressions, appearances, character traits, methods of operation” and “disinformation activities” which it said could be used to identify Jewish people.
“How to defeat them? This cannot go on!” the front page also said, according to the Jewish Telegraphic Agency.
The article was printed alongside a headline reading “Attack on Poland at a conference in Paris”, a reference to a Holocaust studies conference last month whose speakers were accused of being anti-Polish.
The newspaper caused an outcry among Polish politicians when it was distributed in the Sejm, the lower house of the Polish parliament.
Michal Kaminski, an MP for the centre-right Poland Comes First party, said it was an “absolute scandal” such “filthy texts, as if taken from Nazi newspapers” were sold in the Polish parliament, Polsatnews reported.
Mr Kaminski asked for an explanation from parliament speaker Marek Kuchcinski, a member of the ruling right-wing Law and Justice party, for how such an “antisemitic” front page was made available in parliament.
The director of the Sejm Information Centre, Andrzej Grzegrzolka, initially said his office could not take action as the paper was being sold from kiosks inside the Sejm who were responsible for the choice of newspapers.
He also suggested a court could look into the front page and decide whether the title should be suspended under Polish law, which bans hate speech motivated by race or religion.
However, Mr Grzegrzolka later announced his office would request the publication be removed from the Sejm’s press kit.
The newspaper’s front page also featured an image of Jan Gross, a Polish-Jewish academic at Princeton University who has courted controversy for suggesting Polish people were complicit in the murder of Jews during the Holocaust.
Mr Gross’ argument that Poles collaborated with the Nazis during the Second World War has made him a regular target of outrage by Polish nationalists.
The article was published by the Independent

“You All Say ‘Never Again’, Make It So”, Urges Rabbi Menachem Margolin

AHEAD OF MUNICH AUCTION TOMORROW, EUROPEAN JEWISH CHIEF CALLS ON GERMAN POLITICAL LEADERS TO BAN SALE OF NAZI MEMORABILIA
AND PUT BUYERS ON WATCH LIST
“You all say ‘Never Again’, make it so”, urges Rabbi Menachem Margolin .
At 10am today morning (CET) a major Munich based auction house Hermann Historica is conducting an online sale of personal items such as cutlery sets, jewellery and signed letters and photographs belonging to the leadership of the Nazi Party – Himmler, Goring and Hitler himself among them.
European Jewish Association (EJA) Chairman Rabbi Menachem has written to the leadership of all of Germany’s mainstream political parties to put in place legislation that will ban the public sale of such items and - in the meantime - compel sellers to divulge the names of buyers so that they can be kept on government watch lists in the interests of public safety.
In his letter to all the political leaders, the EJA Chief suggested that the authorities would want to know who was buying the personal items of Osama Bin Laden, Anders Breivik or Stephan Ernst for public safety reasons, and those glorifying, sentimentalising or adulating the Nazis are every bit as dangerous.
Rabbi Margolin wrote,
“Almost every week we at the European Jewish Association are having to respond to attacks on community buildings and more worryingly still, physical or verbal attacks on Jews themselves. Alarmingly, it is Germany that leads Europe in the sheer volume of reported anti-Semitic incidents.
“Selling such items should be no different to selling the personal items belonging to Osama Bin Laden, or Anders Breivik. The argument of historical interest is pure semantics. As political representatives concerned with the wellbeing and safety of your citizens, we cannot help wonder if you would not want to know who was buying Bin Laden’s fruit bowl or Stephan Ernst’s photographs and why they would even want them.
“In waiting for a ban to be put in place, we urge the German authorities to compel auction houses to divulge the names of those who are buying such material, in order to know whose hands they have fallen into. The names should then be put on a government ‘watch’ list, for public safety.
“Six Million Jewish lives were lost during the Nazi regime. Today an increasing number of Jewish lives are being lost and more are threatened because of the “oldest hatred”.
“Politicians are wont to say ‘never again’. We urge you to make it so.”

43 nations led by Austria pledge to combat antisemitism at UNHRC

At least 43 nations led by Austria, the Czech Republic and Slovakia pledged to combat antisemitism in a special statement issued at the 48th session of the United Nations Human Rights Council in Geneva.
"We will remain steadfast in our pledge, never again," said Austrian Foreign Minister Alexander Schallenberg as he issued a special video statement in which spoke about the danger of antisemitism.
"Even 75 years after the end of World War II it is a tragic reality that antisemitism is not a thing of the past," Schallenberg stead.
Read more:
https://www.jpost.com/diaspora/antisemitism/43-nations-led-by-austria-pledge-to-combat-antisemitism-at-unhrc-681049

Red Lines Follow-Up, Iceland

Eja director of public affairs was meeting the director of human rights at the Ministry of Foreign Affairs and representatives from the human rights ministry in Reykjavík this morning to discuss Jewish red lines with a particular focus on recent Icelandic parliamentary efforts to outlaw and criminalise Brit Milah (male circumcision).
In an open and frank dialogue, it was clear that circumcision is very much an alien concept to Icelandic people, but there is no Antisemitic motivation behind it. It is just not on their radar whatsoever. When Alex explained that nonetheless such legislation can be used as an enabling tool by those who espouse antisemitism they were receptive to this message. There is more work needed with political parties to get this message through, but it was a good start with Icelandic government officials.

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