Recognising the serious implications of the growing threat of COVID-19, the European Commission has on 13 March 2020 launched a series of proposed changes in legislation and budgetary allocation measures as part of its new “Coronavirus Response Investment Initiative.” The initiative aims to aid small and medium enterprises (“SMEs”) across the Union to cope with COVID-19-related losses as well as related expenditures on the part of Member States and funding of short-term employment schemes.
The focus of the aid is to alleviate the liquidity issues that many SMEs are currently experiencing due to public closures and reduction of market demand. The Commission plans to make available approximately €37 billion under the Cohesion policy, to be used in 2020, with an initial €8 billion to be released and made available to Member States right away. This will be done by forfeiting the obligation on the Member States to refund 2020 unspent pre-financing for European Structural and Investment Funds. The funds could be directed to the most immediate expenses required to tackle the outbreak, such as support to Member States’ healthcare systems and liquidity for companies and businesses.
The initiative takes the form of a legislative proposal for a European regulation to amend the existing three Regulations establishing and regulating the European Regional Development Fund (“ERDF”), the European Social Fund (“ESF”), the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund.
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