FREE MOVEMENT OF GOODS – COVID-19 AND THE MOVEMENT OF GOODS IN THE SINGLE MARKET
We would like to inform you that the European Commission has published several documents related to COVID-19 and the free movement of goods in the single market.
In its Communication of 13/3/2020, the Commission emphasized that national measures restricting the free movement of goods, including personal protective equipment and medical devices, should be proportionate and first communicated to the Commission, which would then inform other state -members. The documents also provide a brief explanation of what “proportional” would mean in the context of a pandemic.
Given the macroeconomic and financial impact of COVID-19, the economic policy response must be bold and coordinated in order to achieve the following objectives:
- Contribute to saving lives. Guaranteeing the necessary supply and investment costs to manage and treat the pandemic.
- It must be ensured that workers in Europe (including self-employed workers) are protected from loss of income and that the most affected companies (especially SMEs) and sectors have the necessary support and financial liquidity.
- Mitigate the impact on the overall economy with all available EU instruments and a flexible EU framework for fully implemented Member States’ actions.
1. Ensuring solidarity in the Single Market:
1.1 Provision of medical equipment and goods
It is essential that national measures pursue the fundamental objective of protecting health in the spirit of European solidarity and cooperation. Some Member States have already adopted or are preparing national measures concerning the export of personal protective equipment such as goggles, face masks, gloves, surgical overalls, medicine, etc. These measures risk preventing such essential goods from reaching those who need them most, in particular healthcare professionals, on-site intervention teams and patients in affected areas across Europe. They create a domino effect: Member States take measures to mitigate the impact of measures taken by other Member States.
The Commission is taking all the necessary steps to ensure an adequate supply of protective equipment across the EU.
The Recommendation on conformity assessment and market surveillance procedures in the context of the COVID-19 threat, published on 16/3/2020, aims to ensure the safe and timely delivery of personal protective equipment and medical devices. Notified bodies are requested to give priority to personal protective equipment; market surveillance authorities may authorize the temporary placing on the market of personal protective equipment and medical devices without CE marking pending the conformity assessment procedure, provided that health and safety levels are maintained.
Land supply chains are strongly affected by the introduction of a ban on entry at land borders or restrictions on drivers of access to certain Member States. This affects all goods, but in particular the supply of critical materials and perishable goods, and since the majority of companies in the sector are SMEs, these impacts are immediate and severe. Regardless of the mode of transport, the Commission is working with Member States on ways to ensure economic continuity, guarantee the flow of goods and the supply chain, secure basic travel as well as the functioning of the internal market and transport safety.
In the Border Management Guidelines of 16/3/2020, the Commission examined in detail all border control measures within the Single Market, emphasizing that the continuity of supply chains should be maintained. Restrictions imposed by Member States on the carriage of goods must be transparent, duly motivated, proportionate, relevant, specific to the type of goods and non-discriminatory. There is no need to impose additional certificates on goods lawfully moving in the single market.
The pressure on the tourism industry in the EU is unprecedented. It faces a significant reduction in international arrivals (mass cancellations and declines in bookings, for example by US, Chinese, Japanese and South Korean travelers). This is also affected by delays in intra-EU travel and the internal market, in particular due to the growing reluctance of EU citizens to travel and national and / or regional safety measures. SMEs in the sector are particularly affected by this overall decline in tourism and business travel.
The Commission liaises with Member States, international bodies and key EU professional associations to monitor the situation and coordinate support measures.
2. MOBILIZING THE EURO BUDGET AND THE EUROPEAN INVESTMENT BANK
2.1. LIQUIDITY MEASURES: SUPPORT FOR COMPANIES, SECTORS AND REGIONS
In order to facilitate the immediate relief of severely affected SMEs, the EU budget will use its existing instruments to support them with liquidity, complementing the measures taken at national level. EUR 1 billion will be provided from the EU budget as a guarantee to the European Investment Fund (EIF) in the coming weeks to support approximately EUR 8 billion in working capital financing and to help at least 100,000 European SMEs. Support will be channeled through existing EIF programs instruments that support investment.
In particular, the COSME loan guarantees – the EU’s SME competitiveness program – will be strengthened, along with InnovFin guarantees for Horizon 2020 SMEs, so that banks offer access to bridge financing for micro-enterprises, SMEs and mid caps. These instruments will be enhanced by EUR 750 million through the European Fund for Strategic Investments (EFSI) in the coming weeks. In addition, credit breaks are envisaged which allow the repayment of loans to be delayed; they will be applied to the affected companies through the same instruments, alleviating the strain on their finances.
2.2 REDUCING THE EMPLOYMENT IMPACT DUE TO THE OUTBREAK
Specific measures are needed to alleviate the impact on employment for people and the sectors most severely affected when production is interrupted or sales decline. We must protect employees from unemployment and loss of income when possible, as they should not fall victim to the situation.
The EU is ready to support Member States in order to mitigate the impact on workers. It is already helping them prevent and tackle unemployment through EU Structural Funds, including the European Social Fund, and the new Coronavirus Response Initiative, which follows below. The Commission will also accelerate the preparation of its legislative proposal for a European Unemployment Insurance Scheme. This initiative seeks to support workers and protect those who have lost their jobs in the event of major shocks, and to reduce the pressure on national public finances, thereby strengthening Europe’s social dimension and increasing its cohesion.
2.3. CORONAVIRUS INITIAL INVESTMENT RESPONSIBILITY
With the Coronavirus Investment Initiative (CRII) proposed today, the Commission proposes to channel € 37 billion in cohesion policy as a result of the announced COVID-19 pandemic and fully implement it in 2020 through exceptional and accelerated procedures. To this end, the Commission proposes this year to waive its obligation to request reimbursement of unspent pre-financing for European Structural and Investment Funds currently held by Member States. This amounts to around € 8 billion from the EU budget, which Member States will be able to use to supplement € 29 billion from structural funding across the EU. This will effectively increase the amount of investment in 2020. In addition, up to EUR 28 billion of the still unallocated Structural Funds from existing national packages, including national contributions, should be fully eligible for crisis management, thus providing countries with -Members the necessary sources of funding. The Commission will set up a high-level working group to work with the Member States to ensure that action can be taken on this basis within weeks.