COVID-19: Contribution to Sharpening Emergency Measures

Executive Summary

• The crisis triggered by the COVID-19 outbreak is expected to be amongst the most violent ever, with social consequences aggravated by its very nature. It has clearly shown how crucial the provision of public services and SGIs, such as healthcare, water, energy, waste management, telecommunications, education, housing and transport, is to the well-being of citizens and the economic resilience of the EU.

• Most SGIs have been working properly throughout the crisis up to now but are dealing with several constraints that must immediately be addressed in order to ensure their continuity:
  • Supply-side shortages: in a global economy, international supply chains disturbances will produce multiple impacts on SGIs provision. 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.
  • Demand-related shifts and changes in the users’ habits: demand-related shifts are asymmetrical amidst SGIs, with some sectors facing a sharp increase in their usage and other 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.