The COVID-19 outbreak, and the response to safeguard public health by limiting social life, has been one of the most violent shocks of the EU history. Century-defining, the current crisis has already provoked multiple impacts for European societies, and its future developments are unexpected and impossible to foresee.
The spread of the virus across Europe has caused tens of thousands of deaths, and many still fighting in ICU. Hundreds of millions of Europeans are currently in lockdown. The economy is in slowdown, and the impact is expected to be as violent as the Great Depression or the 2008 Financial Crisis.
SGI employers and providers at the heart of the crisis
In a context where the threat is economic, social and health-driven, the provision of services of general interest (SGIs) is even more crucial to the well-being of citizens, businesses and the overall economic resilience of the EU. Services such as healthcare, water, energy, waste management, telecommunications, education and transport must remain fully operational, regardless of the challenges faced.
SGI employers must ensure that a sufficient number of workers is available to maintain operations. Additional measures to protect health and safety also have to be put forward, requiring further management efforts and financial costs.
Many SGIs also face significant changes in their usage. Some sectors, such as healthcare, are faced with a sharp upward turn in demand. Managing the life-threatening emergencies, many healthcare structures already anticipate medium-term financial difficulties due to the cancellation of most of the services which constitute a significant source of income. Telecommunication services are also increasing in demand and have been mobilizing great efforts to ensure their stability and quality. On the other hand, the transport sector, and more specifically public transport, had to continue operations and run with adapted services, such as limiting the number of users per vehicle, inducing additional costs and limited incomes.
Crisis-motivated disruptions, such as the difficulties to access supplies or the sudden drop of the EU Emissions Trading Scheme (ETS) price, exercise strong pressure on resources to keep activities running. Price fluctuations must be closely monitored, and no efforts should be spared to guarantee that they remain at sustainable levels, for the preservation of high-quality efficient SGIs.
A call for actions at EU level
After the outbreak of the crisis, EU institutions quickly acted to allow a genuine response to the challenges. The temporary suspension of the Stability and Growth Pact (SGP), the adoption of the European instrument for temporary support to mitigate unemployment risks in an emergency (SURE), the Coronavirus Response Investment Initiative, as well as the temporary framework for State aid, should help to partly absorb the shock. Building up on this initial response, Member States should now step up to support economic actors, including employers and providers of SGIs.
To support this call for specific support to frontline actors, CEEP has reached out to SGI organisations active at EU level to set up a dedicated ‘SGIs facing COVID-19’ platform. Featuring practices collected all over the EU, this platform, as well as the network of associations supporting it, will highlight to institutions the impacts of the crisis on the ground, and serve to contribute to a coordinated exit strategy and a comprehensive recovery plan.
The way forward
Going beyond the immediate emergency, EU institutions and Member States have rightly engaged in talks aimed at fostering the recovery on the medium-term. This recovery must rely on 2 main pillars:
- The EU must put forward a well-designed multiannual financial framework (MFF), relying on a strong Cohesion Policy to help regions most severely hit, on an effective Digital agenda and on a sustainable growth agenda based on the ambition to make Europe the first climate neutral continent by 2050, as well as on the setting-up of an investment strategy,
- A New Dedicated Recovery Fund and an Investment-led Recovery Plan based on joint instruments, such as Recovery Bonds that would allow for a genuine capacity of sharing the burden of the crisis without implying mutualization of existing debts.
The COVID-19 outbreak calls for genuine EU cooperation to overcome its social and economic consequences across the continent. EU institutions, Member States, social partners and the civil society should come together to provide answers to this challenge and bring answers to the expectation of the citizens.
This April 2020 Newsletter intends to bring forward our key messages to address this crisis. I hope they will inspire you, and that we will be able, together, to come out of the crisis stronger.