EurWORK European Observatory of Working Life

COVID-19 pandemic

Definition

COVID-19 is an infectious disease caused by a new strain of coronavirus. Coronaviruses are a large family of viruses which may cause illness in animals or humans. In humans, several coronaviruses are known to cause respiratory infections which are highly contagious, ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS).

The most recently discovered coronavirus disease is COVID-19. ‘CO’ stands for corona, ‘VI’ for virus and ‘D’ for disease. The ‘19’ refers to the year in which it first appeared (2019). The COVID-19 pandemic is an ongoing global pandemic that has caused significant social and economic disruption.

Background and status

The COVID-19 virus and disease were unknown before the outbreak began in Wuhan, China, in December 2019. The COVID-19 pandemic spread rapidly in early 2020, significantly impacting much of the world, including the EU. In the EU, many countries first acted to restrict citizens’ movement, before a large majority of Member States took steps to confine, or ‘lockdown’, citizens.

At the time of the outbreak, the European Commission was initially criticised for being slow to react. Subsequently, it acted within the framework of its limited prerogatives. According to Article 6 of the Treaty on the Functioning of the EU, ‘the Union shall have competence to carry out actions to support, coordinate or supplement the actions of the Member States’. The areas of such action at the EU level include the protection and improvement of human health. In order to protect the health and safety of health professionals first and foremost, and to safeguard and support both the European economy and employment, the Commission implemented a series of measures from March 2020.

Regulatory aspects

Safeguarding healthcare workers

As healthcare workers in many Member States did not have enough personal protective equipment (PPE) such as masks and gowns at the beginning of the pandemic, the Commission issued joint invitations to tender to obtain PPE and other medical equipment (such as artificial respirators) on the world markets. On 19 March, the Commission also launched ‘rescEU’ – the first common European reserve of medical equipment – to help countries affected by the COVID-19 pandemic. For instance, on 2 May, protective masks were distributed to Croatia, Italy and Spain.

Ensuring the free movement of workers

The Commission also took steps to protect the single market, including several initiatives to ensure the free movement of goods, as well as safeguarding another fundamental right: the free movement of workers. On 30 March, it issued practical advice to ensure that mobile workers within the EU – in particular those in occupations critical to fighting the COVID-19 pandemic – could reach their workplace. Together with guidance on temporary restrictions on non-essential travel to the EU, the advice aimed to address the concerns of citizens and companies affected by the measures taken to limit the spread of the disease.

Ensuring the stability of the European economy

The COVID-19 crisis undermined the very heart of European integration – the European Single Market. As part of an urgent response, the Commission adopted a temporary framework to enable Member States to use the full flexibility under state aid rules by activating the ‘general escape’ clause of the Stability and Growth Pact. To reduce layoffs and make it easier for employers to adjust their workers’ hours to meet work requirements, it also submitted a proposal for financing short-time work schemes. Finally, looking ahead to the future and to protect lives and livelihoods, repair the Single Market, as well as to build a lasting and prosperous recovery for all Member States, the Commission proposed a new recovery instrument – Next Generation EU.

Temporary framework

On 19 March, the Commission adopted a temporary framework to enable Member States to use the full flexibility under state aid rules to support the economy in the context of the COVID-19 pandemic. This framework provides for five types of aid:

  • direct grants and selective tax advantages
  • state guarantees for bank loans taken by companies
  • subsidised public loans for companies
  • safeguards for banks that channel support to the real economy
  • short-term export credit insurance

Using this framework, in April the Commission approved 127 state aid measures to support businesses and protect livelihoods across Europe.

General escape clause of the Stability and Growth Pact

On 20 March, the Commission published a communication on the activation of the general escape clause of the Stability and Growth Pact, which enables Member States to implement measures to deal with the crisis without adhering to the normal budgetary requirements of the European fiscal framework. In other words, the budgetary discipline rules imposed on Member States in the euro zone, such as the 3% deficit rule, were suspended.

Short-time work schemes

On 2 April, the Commission submitted a proposal for financing short-time work schemes. This instrument is intended to encourage Member States to borrow from the Commission on favourable terms compared with the rates they would be able to secure on the financial markets in order to finance their short-time working schemes. By allocating funds in the form of loans without conditions, this move signalled a new solidarity between Member States – contrasting notably to the loans granted to some Member States during the 2008 economic and financial crisis.

Next Generation EU

On 27 May, to ensure the recovery ‘is sustainable, even, inclusive and fair for all Member States’, the Commission proposed a new recovery instrument, Next Generation EU. This instrument is in addition to the €100 billion SURE scheme and provides for €750 billion to be borrowed on the markets: €500 billion in the form of subsidies (repayable by Member States based on their contribution to the EU budget) and €250 billion in the form of interest-free loans to Member States. Given that debt-carrying capacity and therefore budgetary autonomy are key attributes of a Member State, this plan is a historical turning point for the EU.

Related dictionary terms

Critical occupations in essential services Economic and Monetary Union euro area free movement of workers mobility of workers protective equipment short-time work SURE initiative Treaty on the Functioning of the European Union Treaty on Stability, Coordination and Governance

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