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European governments & COVID-19 and EU COVID-19 Recovery schemes & Policy

05 June 2020

European governments & COVID-19and

EU COVID-19 Recovery schemes & Policy

[situation: 05.06.2020]

 

European governments & COVID-19

 

Introduction

This document aims to summarise the main governmental actions in response to the COVID-19 emergency in Europe. In particular, it focuses on those national economic and social measures that affect foundations and their staff – directly or indirectly. Moreover, it presents an overview of the measures adopted by the national governments that influence the fundamental rights of the citizens.The information presented is mainly retrieved from official national government websites, while some non-governmental sources were consulted as well. Information has also been retrieved from meetings and resources shared within our network.The information collected in this document is not exhaustive, as we are dealing with an evolving phenomenon and complex political reactions. Please note that this document refers in particular to measures that were not identified in the previous overviews that refer to the situation in April.The document will continue to be updated in the next weeks.

 

Summary of the main socio-economic developments

In the last month, the majority of European countries have focused on the recovery phase of the COVID-19 crisis, mainly from the economic and financial perspectives. This section covers some of the recent national measures that might influence the present and future work of philanthropy in Europe. As of this writing (28 May 2020) and, in comparison, to the previous update (17 April 2020), a higher number of measures that influence the operating environment of European civil society is noted with positive examples of measures that explicitly mention the sector in the revival period. For instance, some funds were created addressing specific sectors or groups of people, in particular, the cultural sector. Another relevant trend regards flexibility in tax policies for the sector.

 

Relevant normative and policy developments of funds directed to the civil society sector:

 

  • Austria: a support fund for the third sector of EUR 700 mln the 13th May
  • Ireland: Covid-19 Stability Fund for Community and Voluntary, Charity and Social Enterprises of EUR 35 mln, has been made available through the Dormant Accounts Fund on the 6th May
  • Italy: the Decreto Rilancio of 19th May 2020, which increased the civil society sector fund by EUR 100 mln for the year 2020
  • UK: an addition of £150mln from dormant bank accounts to help charities, social enterprises and vulnerable people during the coronavirus lockdown to the £750 mln package of support for charities in the UK, which was established in April

 

 

Relevant developments in tax policies which affect the work of civil society:

 

  • France: the maximum of donations to associations allowing a tax deduction of 75%, was almost doubled by the Senate, going from EUR 537 to EUR 1000 (dispositif Coluche)
  • Germany: flexibility for donations envisioned by Ministry of Finance
  • Italy: (Decreto Rilancio, May 2020) proposes the acceleration of the 5x1000 allocation procedures for the 2019 financial year
  • Russia: tax concessions for donations to NGOs, which are not limited to actions that tackle the crisis
  • Slovakia: amendment to the 2% law- taxpayers are given extra time to decide how to allocate their 2%, and NGOs are given an extra year in which to use funds raised in 2019 through this scheme
  • Spain: Royal Decree-Law 17/2020, introduced in May 2020 approves measures to support the sector with tax concessions to face the economic and social impact of COVID-2019
  • Turkey: postponement of tax declaration for NGOs
  • UK: the “Gift Aid” has become more flexible in order to help charities and foundations in the context of cancelled events and refunds, membership subscriptions and Gift Aid Small Donations Scheme.The Arts Council England has also established cultural tax reliefs in the context of the Coronavirus outbreak.

 

Relevant national government developments and introduction of funds addressing specific sectors or groups of people

 

  • Belgium: French community: support to sectors hit by the containment measures (cultural, social, educational, youth, sports sector, etc.) amounting to EUR 50 mln. German community: Support to sectors hit by the containment measures (cultural, social, educational, youth, sports sector, etc.) amounting to EUR 10 mln. Flanders: support to subsidised sectors (e.g. culture, youth, media, sports, school trips) and specific sectors (horticulture, parts of tourism, mobility and public works) amounting to EUR 200 mln.
  • Bulgaria: EUR 22.5 mln provided to support municipalities in expanding home delivery of food, medicine and other essential goods to older people and persons with disabilities who are affected by the measures to contain COVID-19.
  • Italy: the Decreto Rilancio of May 2020 provides support to the civil society in the South with EUR 20 mln reserved for tackling educational poverty, and 20 mln for 2021. Increases for disability assistance and services, food emergency and cultural funds are also envisioned.
  • Spain: Royal Decree-Law 17/2020 of May 2020 establishes EUR 76 mln in aid for the cultural sector and the financing of cultural companies. Specific focus for tackling child poverty, gender violence and social integration of Roma is confirmed.
  • Switzerland: emergency aid for cultural actors
  • UK: Arts Council England Emergency Response Package, Historic England Emergency Relief Fund, National Lottery Heritage Fund Emergency Fund, Resilience and Recovery Loan Fund and Sport England Community Emergency Fund were introduced

 

 

Relevant developments of measures for workers of the civil society field:

 

  • France: creation of a job platform,“Mobilisation Emploi” for different sectors
  • Italy: new skills fund as a specific training fund for workers has been activated
  • Luxembourg: Financial support measures for cultural professionals
  • UK, Italy, Germany: Job preservation measures for the civil society sector

 

 

Recent developments affecting the Fundamental Rights:

 

In these days, the state of emergency has been lifted throughout Europe which positively impact all those rights that were infringed as a result of Covid-19 crisis such as the right of assembly and free movements in the EU.In general, noteworthy examples at the national level are emerging addressing the concerns raised by civil society throughout Europe in regard to people’s right to health, human dignity, to free speech, privacy and migrants rights. These were also identified in the previous document and are mainly retrieved from the European Union Agency for Fundamental Rights- Coronavirus pandemic in the EU - Fundamental Rights Implications - Bulletin 2.

 

  • Hungary’s government recently announced the end of the state emergency on June 20, though uncertainty remains around the law foreseeing penalties for COVID-19 related offences such as fear mongering and spread of misinformation that affects the right of free speech. Moreover, the possibility of declaring a new "health emergency" in the country without parliamentary approval for a period of six months that could be renewed indefinitely, raises international concern around a possible suspension of basic rights.
  • Concerns remain throughout Europe with regards to judicial proceedings as disruptions mostly occurred with postponement or adjournment of court proceedings, and the extension of deadlines.
  • Some member states, including Germany, Belgium, Cyprus, Slovenia and Portugal, have addressed civil society concerns about the rights of detained people byadopting alternative forms of detentions such as house arrest and early release.
  • The rights of the elderly and people in residential care centres have also been considered by national measures in countries such as in Ireland, Portugal and Luxembourg. These measures foresee systematic tests for all residents as well as staff of long-term residential care.
  • In regard to the condition of migrants concerns remain, as asylum services and migrant assistance are not fully reactivated yet in some Member States, though positive developments have already emerged in Portugal as of March 2020 and in Italy as of May 2020. Thus, the Decreto Rilancio contemplates the short-term regularization of undocumented migrants, who already worked in 2019.
  • The debate around the use of contact-tracing apps and their implications of digital rights and privacy is still vivid. The use is voluntary throughout Europe and national DPAs have been involved in the national developments.
  • Government’s treatment of sensitive data continues to be a noteworthy concern as listing of COVID-19 patients have occurred in Member States such as Austria, Cyprus, Greece, Hungary, Bulgaria and Slovenia. In Slovakia, Portugal and Romania, data was published that can lead to the identification of patients. Furthermore, concerns have been raised by civil society organisations in Hungary where lists of persons who died from the Covid-19 virus were published, including personal data.

 

 

 

EU COVID-19 Recovery schemes & Policy

 

€540 billion support package [operationalisation by 1st of June]: Workers, Business & Countries (SURE; EIB Guarantee Fund for Workers and Businesses; ESM Crisis Support)
Redirection of EU funds:

-        €37 billion from structural funds

-        €800 million through EU Solidarity Fund

-        €3.1 billion from 2020 budget (EU Health Programme)

o   €2.7 billion through Emergency Support Instrument

o   €300 million through rescEU medical equipment

o   Additional funding: MS and philanthropy

Flexibility of rules:

-        Use of structural funds

-        EU fiscal rules

EIB:

-        €40 billion liquidity for SME’s

-        €870 billion programme for purchase of private and public securities

-        InvestEU: from €38 to €75 billion guarantee + new Solvency Support Instrument (€500 billion) + new Strategic Investment Facility (€150 billion)

MFF:

-        Preparation of a Recovery Plan: green & digital & resilience MFF (€1.1 trillion) + Next Generation EU recovery fund (€750 billion) [debates Council]

-        New Solvency Support Instrument for companies [strengthened InvestEU (€75 billion guarantee), managed by EIB, soon to have an InvestEU Advisory Hub, building on experience of European Investment Advisory Hub]

ESM Board of Governors:

-        ESM Pandemic Crisis Support for sovereigns

o   Pandemic Response Plan tbc

o   ‘Support domestic financing of direct and indirect healthcare, cure and prevention related costs due to the COVID-19 crisis

SURE
EUStaff & KBF
European Innovation Council (EIC):

-        Hackathon April

-        Matchathon May [foundations as funders for winning projects of Hackathon]

 

Update [27.05.2020]:
European Commission presents ambitious Recovery Plan for Europe

The European Commission yesterday presented its green, digital and resilient Recovery Planfor Europe: the new MFF of 1.1 trillion and the recovery fund “Next Generation EU” of 750billion, to be distributed in 500 billion in grants and 250 billion in loans. France and Germanyare considered to be drivers of this ambitious plan, referring to last week’s Franco-German proposal which mentioned a 500 billion euros package. Also, previous conversations were affirmed around the introduction of new own financial resources (through) to back this ambitious plan, through for example the introduction of climate, digital and corporate taxes. The additionally introduced common debt is seen as a paradigm shift in the functioning of the EU. President von der Leyen stressed that this is exceptional and aims at recovering from the unprecedented crisis posed by Covid-19. This will be done by increasing the MFF headroom and issuing bonds on the financial markets on behalf of the EU.

Both the MFF and the recovery fund are linked as parts of the long-term EU Budget, hencethey won’t enter into force before 2021. Therefore, national governments will need to fill the gap until the end of 2020. The “Next Generation EU” recovery instrument is set for 2021- 2024, whereas the reinforced MFF runs as per usual from 2021-2027. The budget is furthermore linked to the European Semester, which allows for targeted aid to the EU Member States, taking into account national specifications, as well as a green and digital approach. The debates around conditionality are just starting, with discussions at national and Council level in preparation of the European Council on June 19th. The so called “frugal four” (Denmark, the Netherlands, Sweden and Austria) are expected to hinder the upcomingnegotiations between the Member States, but political analysists suggest that they might be inclined to accept the bold plan since a big emphasis is put on the need for the recovery tobe green. This is also reflected in the “Next Generation EU” recovery fund, where on the one hand, the principle to “do no harm” has been integrated across the new recovery plan together with a climate taxonomy and the plan to contribute 25% of the investment to the green transition. On the other hand, the budget has been criticised of still allowing investment in polluting activities and being insufficiently large to address the climate crisis.1Angela Merkel stated the upcoming German presidency will “constructively guide” the negotiations, which she expects to conclude by Fall.2

Part of members’ decision will have to deal with the “Next Generation EU” recovery fund, for which President von der Leyen foresees its financing through member states’ guarantees, allowing the Commission to borrow €750 billion on the markets. The President proposedtwo new instruments, the “Solvency Support Instrument” (€600 billion) and the “Strategic Investment Facility” (€150 billion), as well as strengthening InvestEU (from €38 billion to €75billion guarantee) to attract private capital through EU guarantees. The new instruments will also be managed by the EIB through InvestEU, will be green and digital, and support key value chains such as medical equipment and pharmaceutical products.3
A thorough analysis about the reviewed EU strategy will be undertaken by Philanthropy Advocacy, but we can already see the importance allocated to private capital. The Commission presented the EU budget as a bridge between:

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Philanthropy Advocacy will further analyse the entry-points for foundations and philanthropy in the new EU Budget.

Contact at the PA team

  • Mara Imbergamo: mara.imbergamo@dafne-online.eu
  • Nikoleta Bitterova: nbitterova@efc.be
  • Hanna Hanses: hanna.hanses@dafne-online.eu