ZEI Monitor: EU Progress 2019-2024

Social Europe

• EU-SURE Bond Emission:On the 21st of October 2020, the European Commission for the first time conducted an emission of the EU-SURE social bond worth 17 billion euro. (Press release)

• SURE-Regulation - Entry into force: On the 20th of May 2020, the SURE-Regulation on short term work came into force after publication in the Official Journal of the European Union. This enables the European Commission to issue social bonds on the capital market, in particular to secure jobs. It contains 16 articles on the conditions and procedure for financial assistance from the member states.

• SURE Regulation - Legislative proposal: The legal act is based on a Proposal  for a Regulation of the European Commission dated on the 2nd of April 2020 for the solidarity instrument SURE. With the submitted draft, the Commission wants to support the member states in their short time work programs and similar measures in connection with the coronavirus pandemic. (Press release)

The Commission's objective is to mitigate the consequences of the coronavirus outbreak and its socio-economic impact, in particular by protecting jobs and thus livelihoods and human lives. In order to achieve this, the regulation creates a European instrument, which temporarily helps the member states to reduce the risk of unemployment (SURE). The measure is temporary, its duration and scope is limited to dealing with the consequences of the pandemic. Payment is conditional on actual or planned public expenditure by the member states, which has increased substantially as a result of measures taken to deal with the coronavirus outbreak. The aid package offers a total of up to 100 billion euro for the support program. The assistance takes the form of a loan to the member state concerned, the loan contract is concluded with the European Commission. The applicant states must provide a binding guarantee.

Economic Governance: EU Recovery Instrument ('Next Generation EU')

• Proposal for the legal framework of the 'EU Recovery Instrument':

On the 28th of May 2020, the European Commission presented a Proposal for a Council Regulation on the Establishment of a European Union Recovery Instrument to support the recovery in the aftermath of the COVID-19 pandemic. The Instrument shall be financed up to an amount of 750 billion euro. The support will include grants, loans and guarantees.

Grants shall amount to 433.2 billion euro in the form of non-repayable support and repayable support through financial instruments.

Loans to the member states will be up to 250 billion euro for a programme financing recovery and economic and social resilience via support to reforms and investments.

Guarantees of up to 66.8 billion euro.    

• Key operational pillar - the 'Recovery and Resilience Facility':

As the key pillar of 'Next Generation EU', the European Commission on the 28th of May 2020 put forward a Proposal for a Regulation establishing a Recovery and Resilience Facility.

Key principles and elements include:

General objective: Promoting the Union’s economic, social and territorial cohesion by improving the resilience and adjustment  capacity of the member states, mitigating the social and economic impact of  the crisis, and supporting the green and digital transitions, thereby contributing to restoring the growth potential of the economies of the Union, fostering employment creation in the aftermath of the COVID-19  crisis, and promoting sustainable growth.

Financing volume: a. 334.95 billion euro in grants for non-repayable support; b. 267.955 billion euro for  loan support to member states

How does it work? A maximum financial contribution shall be calculated for each member state for the allocation of the amount of the GRANTS based on the population, the inverse of the per capita Gross Domestic Product (GDP) and the relative unemployment rate of each member state.

Additionality: Support under the Recovery and Resilience Facility shall be additional to the support provided under other Union funds and programs.

Eligibility criteria: Member states shall prepare national recovery and resilience plans. These plans shall set out the reform and investment agenda of the member state concerned for the subsequent four years. Recovery and resilience plans eligible for financing under this instrument shall comprise measures for the implementation of reforms and public investment projects through a coherent package
The recovery and resilience plans shall be consistent with the relevant country-specific challenges and priorities identified in the context ofthe European Semester, in particular those relevant for or resulting from the green and digital transition.

Compliance of member states: Where the recovery and resilience plan does not comply satisfactorily with the criteria / modes of use set out in Article 16(3) of the Regulation, no financial contribution shall be allocated to the member state concerned.

Deepening the Capital Markets Union

Completing the Banking Union

Effective Taxation

Customs Union Package