EU opens internal and external borders, EU preparedness for future crisis events under question, EP challenges COVID-19’s classification as highest risk category.
- Never waste a good crisis: Internal Market Commissioner Breton and High Representative Borrell published a joint op-edtitled “For a united, resilient and sovereign Europe”, arguing to leverage the crisis to further Europe’s strategic position in the world. They are calling for the increase of EU “hard power”, in the sense of military capacity and defence, but also call for more autonomy in key industries such as health, technology, critical raw materials, and critical infrastructures. Those are also to be protected from “predation by non-European players”. Another aspect which has been amplified by the pandemic is disinformation and the need to protect the EU from an “infodemic” – “attempts of manipulation by foreign powers”.
- Disinformation: In the context of the pandemic, disinformation can kill, High Representative Borrell has said during a press conference with his colleague Vera Jourova, Commissioner for Values and Transparency. To curb this “infodemic”, the Commission has asked social media platforms to share monthly reports on disinformation activities, and to improve users’ awareness.
- State Aid: Since this newsletter was published last, the Commission approved a number of Member State state-aid applications under the temporary framework for state aid. Below is an overview, and here are all the details.
- France: €5 billion for R&D of COVID-19 products
- Lithuania: €30.5 million to support bovine and milk producers affected by the crisis
- Hungary: €155 million direct grants to support the economy
- Classification of COVID-19: The European Parliament has objected the classification of COVID-19 as a “group 3” biological agent, which is one rank short of the highest risk category. The classification also entails protective measures to be adopted in workplaces, but unions protested against the perspective of the Commission. According to unions, any classification under the highest category 4 would endanger workers. Several MEPs tabled a cross-party objection to the Commission’s classification, which had been adopted with most MEPs in favour. The motion will now be tabled in plenary next week. The Commission has previously said that a review was not off the table.
- European Investment Bank (EIB): The EIB has asked Member States for more resources to implement the Commission’s recovery plan. President Werner Hoyer has written a letter to the Bank’s board, which is made up of senior Member State officials, outlining the EIB’s requirements for more capital and human resources. EU finance ministers were due to discuss the matter on Tuesday, 9th June (source: POLITICO).
- European Medicines Agency (EMA): The EMA’s Executive Steering Group on Shortages of Medicines Caused by Major Events met on 3rd June to review availability of medicines amidst the pandemic. The group agreed to set up a working party to develop a monitoring and sharing framework for the demand of medicines to prepare for a possible second wave in autumn.
(Former) Member States
- A group of six Member States wrote to President von der Leyen, questioning the preparedness of the EU for future events like the pandemic. Denmark, France, Germany, Poland, Spain and Belgium wrote the paper highlighting key parameters for a common European approach.
- Efficient monitoring and data sharing through central data points and interoperability, continuous monitoring and shared analysis, and a stronger mandate for the European Centre for Disease Prevention and Control.
- Coordination of supplies through shared production within the EU, maintaining strategic stocks of medicines and medical equipment, also through rescEU, and common criteria for distribution of crisis stocks.
- Research and innovation as to joint vaccine development, coordinated diagnostics and treatment, sharing of research data, and research into the behavioural aspects of COVID-19.
- A regulatory framework that strengthens the single market to build resilience, permanent antitrust guidelines for the times of crisis, and evaluation of the effectiveness of joint public procurement.
- Global value chains that are open, fair, and flexible to reduce overreliance on single suppliers, secure critical inputs, prevent protectionism, ensure flow of trade by transport, and compliance with multilateral trading rules.
- Production facilities supported by minimum public procurement schemes, incentives for production of critical inputs, ensuring adaptability based on digital production and Member State collaboration to increase resilience.
- Italy: Recently, Italy extended its investment screening procedures to include more sectors and intra-EU deals due to the COVID-19 crisis. According to POLITICO, Italy is now planning to further extend those measures and adopt a new decree to decide which sectors and companies will be considered of special importance, allowing the government to block foreign investments in strategic sectors in the future. The latest draft does not cover industry sectors such as the steel industry in Italy, as this might be not be justifiable by EU law and investment freedom.
- Germany: German exports fell by a record 24% in April due to the Covid-19 crisis. Coupled with one of Germany’s lowest trade surpluses since December 2000, the outlook is grim but ING analysts note that “the worst should now be behind us.” The foreign sale of goods and services was €75.7 billion in April, with the almost quarter drop being the steepest since Germany started tracking trade statistics in 1950.
- Opening internal and external borders: The Commission has requested Member States to lift internal travel restrictions by 15th June the latest. Several Member States have already begun to reduce restrictions and open borders, while others are planning to do so in the near future. Additionally, in consideration of the epidemiological situation in the EU as well as around the world, the Commission no longer thinks that travel restrictions at external borders need to apply to all third countries. Instead, they could be gradually lifted depending on “clear criteria and subject to constant monitoring”, such as the number of infections per 100,000 inhabitants, trends in new infections, and a country’s overall response to COVID-19. It is also noted that EU citizens and those of Schengen Associated States, as well as legal residents and their family members, should be allowed to travel to the EU regardless of purpose, not just to return home.
- Spain & Italy leading thought: Ahead of the Commission’s announcement, Spanish PM Sanchez and Italian PM Conte sent a letter to President von der Leyen asking the European Centre for Disease Prevention and Control to play a bigger role in the re-opening of borders (source: POLITICO).
- EU supports innovative path to recovery: The Commission announced that it has awarded almost €166 million to 36 companies through the European Innovation Council (EIC) Accelerator Pilot that created innovative ways to fight the virus. An additional 36 companies will split €148 million contributed by the recovery plan for Europe. The first group of 36 companies include those that used innovations like bio-decontamination wipes, developing ventilation monitoring systems, and developing an antibody platform to treat severe cases of infection. The second group of 36 are those working to help the EU recover via renewable energy, blockchain for recycling and more.
Tackling the Virus
- EIB puts its vaccine hopes in Germany’s hands: German biotech company BioNTech will receive a €100 million debt financing package from the European Investment Bank (EIB) to help manufacture the company’s four vaccine candidates. The funds will be used to deploy the candidates more quickly if they are shown to be effective. BioNTech, in conjunction with the University of Oxford, were the first vaccine project to reach clinical trials in Europe. This is the second time a German pharma company has received funds from the EIB to help find a vaccine, with CureVac receiving millions in equity investment in April.
- Illegal disinfectant: A majority of EU Member States has noted the increased presence of illegal disinfectants on their markets, according to a report by the European Chemicals Agency. This is likely a result of a rampant increase in demand in the wake of the pandemic, but not all suppliers are looking to promote fraudulent or malicious products. Instead, the new demand might have attracted new suppliers who do not have proper knowledge about the regulatory framework of the EU and thus struggle to fulfill their obligations under single market rules.