The crisis triggered by the COVID-19 outbreak is expected to be amongst the most violent ever, with social consequences aggravated by its very health-based nature. This outbreak has also clearly highlighted how crucial the provision of public services and SGIs, such as healthcare, water, energy, waste management, telecommunications, education and transport, is to the well-being of citizens and the economic resilience of the EU.
The costs of crisis management are now growing exponentially, implying that any delay in the provision of the necessary funds on the ground will create even further expenses in the future. Short and long-term answers are intrinsically intertwined, and the EU must promptly mobilize every effort in order to prevent a domino effect from setting in and affecting an even larger range of economic activities.
CEEP highlights the need for emergency planning to ensure the continuity of public services and SGIs, addressing both the challenges related to the supply and the demand sides of the provision of services. Many issues are currently faced by our members on the ground across Europe.
Whilst most SGIs have indeed been working properly throughout the crisis up to now, many are dealing with several constraints that must immediately be addressed in order to ensure their continuity. On the one hand, the supply-side shortages are the consequences of the international supply chains disturbances underway, which will produce multiple impacts on SGIs provision due to the global economy we are all living in. Supply-side shortages such as, amongst others, the overall issues linked to the management and protection of workers, are now threatening the proper operationalization of SGI activities.
On the other hand, users have shifted their consumption habits. Those demand-related shifts are asymmetrical amidst SGIs, with some sectors facing a sharp increase in their usage and others an unprecedented drop. Those disruptions will soon exercise strong pressure – both in nominal and real terms – on indispensable resources to keep those activities running.
The coordination at EU level must be ensured and an appropriate framework put forward. Important steps have already been taken by the European Commission. Nevertheless, some aspects have not been integrated yet into the EU emergency response:
- A level-playing field on State aid: it is necessary to clarify that all public undertakings may also be subject to Article 107 TFEU in the case of financial problems.
- Addressees of State aid in the crisis: one of the main challenges for SGIs is to maintain financial management, with the support of the banks. An additional support on the preparation of a recovery plan is necessary in the form of aid to enterprises, to ensure that advance payments are recoverable over a long period.
- Supporting Public Services SMEs: The COVID-19 outbreak is affecting small and medium sized public services enterprises, calling for special support based on a general problem of SMEs in such times of crisis, independently of the ownership structure.
You can consult the full CEEP Paper “Contribution to sharpening Emergency Measures” here.