European Papers (Jul 2020)
The European Union's Financial Contribution to the Response to the Covid-19 Crisis: An Overview of Existing Mechanisms, Proposals Under Discussion and Open Issues
Abstract
(Series Information) European Papers - A Journal on Law and Integration, 2020 5(2), 1021-1044 | European Forum Insight of 23 July 2020 | (Table of Contents) I. Introduction. - II. New or upgraded financial mechanisms. - II.1. Direct support to public health and humanitarian aid. - II.2. Research and pandemic preparedness. - II.3. Economic and social measures. - III. Trends and open issues. - III.1. Resources: how much fresh money and where will it come from? - III.2. Expenditure: for whom and when? - III.3. What financial contribution to the international economic response to the Covid-19 crisis? | (Abstract) This Insight contains an overview of the measures through which EU institutions and organs financially contribute to the response to the Covid-19 crisis. Measures address direct support to public health and to humanitarian aid, research, and economic and social consequences of the crisis. The response is the most diverse, as it includes monetary policy measures (the ECB's Pandemic Emergency Purchase Programme, PEPP), a new European Investment Bank (EIB) Guarantee Fund, measures financed by the EU budget 2020 (Coronavirus Response Investment Initiative, Coronavirus Response Investment Initiative Plus) and the innovative Support to mitigate Unemployment Risks in an Emergency (SURE). Other measures are under discussion: new amendments to the 2020 budget, new external action measures and, most notably, the recovery plan Next Generation EU and a new Commission proposal for the 2021-2027 Multiannual Financial Framework (MFF). Four mechanisms rely on fresh additional resources: the EIB Guarantee Fund, SURE, Next Generation EU and the PEPP, with specific political and legal difficulties for each mechanism. Expenditure relies on a complex interplay of grants, loans and guarantees available in different time frames, which makes it difficult to assess the EU's financial ability to tackle inequalities created by the Covid-19 crisis. Externally, EU measures partly fit in financing schemes at the global level regarding public health and research, but not yet on economic issues, where further action can be expected.
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