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THE EUROPEAN INSTRUMENT FOR TEMPORARY SUPPORT TO MITIGATE UNEMPLOYMENT RISKS IN AN EMERGENCY (SURE) – AN INNOVATIVE (SOCIAL) APPROACH TO EU FINANCIAL ASSISTANCE Karl Croonenborghs
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A DWARF IN SIZE, BUT A GIANT IN SHIFTING A PARADIGM – THE EUROPEAN INSTRUMENT FOR TEMPORARY SUPPORT TO MITIGATE UNEMPLOYMENT RISKS (SURE) René Repasi
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The European instrument for temporary support to mitigate unemployment risks in an emergency SURE) – an innovative (social) approach to EU financial assistance Karl Croonenborghs 1
Member States’ economies and labour markets across the EU, the Commission hinted at a very early stage its intention to support Member States where possible in alleviating the impact of the pandemic on workers. On 2 April 2020, it released its SURE proposal as part of the immediate crisis response organised by the EU. SURE eventually became one of the three safety nets for a total of 540 billion euros, which were discussed and politically endorsed by Member States in the Eurogroup on 9 April and by the European Council on 23 April. After constructive negotiations in the Council, the latter adopted SURE in a relative short time span, on 19 May 2020.
Introduction The establishment of a European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) supports a socio-economic goal, namely helping Member States to protect employment in the current economic crisis. Besides this important policy objective, and the fact that the EU is able to mobilise sizable nancial support to that avail, the instrument deserves some attention for the innovative legal and nancial techniques that it mobilises. Council Regulation (EU) 2020/672 on the establishment of SURE displays an innovative legal approach for emergency instruments under Article 122 TFEU. Moreover, Member States have accepted an alternative nancing technique to underpin the nancial assistance offered under the instrument based on guarantees in favour of the Union. However, SURE did not fall from heaven. The political guidelines of the von der Leyen Commission had already stressed the importance of mechanisms to protect employment. In response to the COVID-19 pandemic and ensuing lockdown measures, which heavily affect
The SURE instrument: key features The key features of SURE pertain to the policy rationale of the instrument, which is expressed in the scope of the instrument, the nancing technique of guarantees used to support its nancial repower, and lastly, its temporary nature.
1. Karl Croonenborghs is a senior lawyer working at the European Commission’s Directorate-general for Economic and Financial affairs. His expertise and daily legal practice is in the law of the Economic and Monetary union, EU and euro area nancial safety nets and central bank law. The information and views set out in this contribution are those of the author and do not necessarily reect the ofcial opinion of the European Commission.
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• This underlying policy rationale is rmly embedded in the scope of SURE. The instrument aims primarily at nancing Member States’ existing or new national measures directly related to short-time work schemes or similar measures aimed to protect employees and self-employed to reduce the incidence of partial unemployment and the related loss of income caused by the COVID 19 pandemic. In an ancillary manner, some health measures, in particular those related to the workplace to contain occupational hazards and protect workers, could also be nanced (Article 1(2) SURE Regulation and recital 5). The maximum amount of EU nancial assistance available under SURE is 100 billion, all in the form of loans.
• SURE’s underlying policy rationale reveals it is a genuine socio-economic policy response at EU level to mitigate the effects of the current economic difculties caused by the COVID-19 pandemic. In essence, the instrument supports national efforts to address the sudden and severe increase in public expenditure for national measures supporting short-time work. The latter are public policy programmes, which compensate workers for the hours not worked in case businesses suspend or substantially reduce the working hours of their employees in a crisis. Such schemes are in the long term benecial because they prevent labour shedding and prevent a temporary shock from having long-lasting consequences on the labour market in Member States – beneciary rms reduce their activities but need not reduce their workforce. In addition, such schemes help to sustain workers’ incomes and preserve productive capacity and human capital of enterprises and the economy as a whole. The current crisis has spurred on those Member States that did not have such schemes to create them at a quickened pace.
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• Financial assistance to Member States under SURE is possible because the EU is able to raise borrowed amounts under very benecial conditions in the international capital markets due to its high credit rating. The proceeds of such borrowings are then lent on to Member States (back-to-back loans). The loans from the EU budget to Member States
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economic impact of the COVID-19 crisis on Member States’ labour markets. To this end, a ‘sunset clause’ allows Member States to request assistance under SURE only until the end of December 2022, although its duration can be prolonged for six months at a time if the severe economic disturbance caused by the COVID 19 pandemic persists (Article 12(3) and (4) SURE Regulation), which reects the uncertainty regarding a second wave of the pandemic.
should be guaranteed by the Member States themselves, in line with the shares of Member States in the total Gross National Income of the Union, for a total amount of 25 billion euros. Those national guarantees, which are voluntarily committed to the EU, ensure that the contingent liabilities for the EU budget arising from SURE loans granted are compatible with the applicable multiannual nancial framework and own resources ceilings. In this context, were a Member State to default on a SURE loan when the EU should repay its creditors, and once the Commission has examined the extent to which it could draw on the margin available under the own resources ceiling for payment appropriations, it could call on those guarantees (Articles 4 and 11 SURE Regulation). Finally, several other budgetary safeguards are built in the scheme to ensure its nancial solidity (Article 9 SURE Regulation). SURE will only become operational once all Member States have voluntarily given such guarantees to the EU and have signed their respective guarantee agreements with the Commission (Article 12 SURE Regulation).
Legal reections regarding the SURE instrument Lending component of SURE The innovative nature of SURE lies in the fact that it is the rst example of how EU nancial assistance under Article 122(2) TFEU can be used to help Member States mitigate the negative socioeconomic impact of a severe economic disturbance by clearly focussing support on safeguarding the employment of workers. This approach under Article 122(2) TFEU is new in comparison to its previous use in 2010, when it was used to establish the European Financial Stabilisation Mechanism (EFSM) (Council Regulation (EU) No 407/2010). The latter allowed for nancial assistance to Member Sta-
• SURE is a temporary instrument. Its use will be limited to tackle the negative socio-
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The lending component of the SURE instrument meets all the requirements of Article 122(2) TFEU and is fully in line with the Pringle judgment (C-370/12) of the Court of Justice of the European Union (CJEU). SURE will offer ad hoc EU nancial assistance by means of temporary loans to Member States that are facing, or are seriously threatened with, a severe economic disturbance (‘the difculty’) due to (‘the causal link’) the COVID-19 pandemic (the ‘exceptional occurrence’). The nancial assistance under SURE is conditioned on the beneciary Member State using the loan support under the instrument to nance national measures in support of employment for which public expenditure has suddenly and severely increased since the beginning of the COVID-19 pandemic (Articles 1 and 3 SURE Regulation). As such, SURE will help Member States conduct economic policies in accordance with the objectives of the EU pursuant to Article 3 TEU (such as the wellbeing of peoples, a social market economy aiming at full employment and social progress and a high level of protection, the promotion of solidarity) and Article 9 TFEU (the promotion of a high level of employment and
tes confronted with severe economic or nancial disturbances so as to preserve the EU’s nancial stability in exchange for indepth economic reforms. However, the use of Article 122(2) TFEU is not limited to nancial stability crises only. The legal basis could be used to address other types of economic difculties, whether actual or threatened, caused by any kind of exceptional occurrence beyond Member States’ control, including health hazards causing a symmetric shock in Member States’ economies. The Council has a broad margin of discretion to adopt an emergency act by qualied majority voting in support of Member States’ economic policies under this legal basis. This is due to the explicit crisis rationale of the provision and its placement by the Treaty drafters in the chapter on economic policy of the TFEU. Moreover, the legal basis does not require an approach of the Council to make receipt of EU nancial assistance conditional on the undertaking of economic reforms, as it did for the EFSM. The latter was a temporary instrument under Article 122(2) TFEU addressing the particular problems of Member States during the nancial and sovereign debt crisis to restore nancial market access.
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me ensuring the prudent nancial management of the EU necessary to maintain its high credit rating on international capital markets.
adequate social protection in the EU’s policies and activities). In addition, even though it was legally not strictly necessary in view of the legal basis concerned, the temporary nature of SURE is further strengthened by means of a sunset clause (Article 12 SURE Regulation).
Construing a guarantee system under Article 122(1) TFEU is legally possible. Under this provision, the Council has a broad margin of discretion to decide whether its requirements are met. Article 122(1) TFEU enables the Council to decide on measures appropriate to the economic situation in a spirit of solidarity between Member States. The COVID-19 pandemic is a sudden and exceptional event entailing a massive disruptive impact on economies and Member States’ labour markets calling for a collective response. Hence, a guarantee system based on voluntary contributions by Member States in the form of guarantees constitute a measure appropriate to the current severe economic situation caused by the pandemic, which the Council members may decide in a spirit of solidarity among themselves. It is important to emphasise that the SURE Regulation, an act of EU law, does not impose any legal obligation on Member States to provide a guarantee. Any commitment to contribute to the guarantee system based on Article 122(1) TFEU in SURE is the result of individual sovereign decisions by Member States in accordance with national law.
Budgetary component of SURE Much of the academic attention in the EMU legal community regarding Article 122 TFEU has focussed on the second paragraph. However, the rst paragraph of the provision is not to be legally underestimated. SURE is also innovative in how the instrument establishes, for the rst time, a guarantee system based on Article 122(1) TFEU, which underpins the EU’s borrowed amounts to enable the EU to provide nancial assistance to Member States pursuant to Article 122(2) TFEU. Usually, contingent liabilities arising for the EU budget under the EU nancial assistance instrument sensu lato are covered by the margin under the own resources ceiling for payment appropriations (EFSM, Balance of Payments Facility). Although a guarantee system supporting nancial assistance under this legal basis is an innovation, such guarantees have been used in the past by the European Community to enable the provision of nancial support to Member States faced with balance of payments difculties due to the oil crisis (1975 Community Loan Mechanism). Member States also made use of guarantees to enable the European Financial Stability Facility, a public limited liability company, to raise money to lend it on to euro area Member States. In the current circumstances, the guarantee system is required to achieve the necessary nancial capacity of the instrument of up to 100 billion while at the same ti-
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However, two important reections should be made in this regard from a nancial market perspective. Firstly, it is key that the national guarantees are irrevocable, unconditional and on demand. This is to ensure that nancial market actors perceive the guarantees as nancially credible to counterguarantee the risk borne by the EU vis-à-vis its own creditors in the unlikely event of a Member State defaulting on a SURE loan,
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Next steps on SURE
which the EU has nanced by borrowing on the nancial markets. Secondly, to further support the nancial solidity of the construct, it is important that all Member States of the EU show political cohesion and voluntarily contribute guarantees to the guarantee system. This explains why, although this would not be a legal requirement for such an instrument, the availability of nancial assistance under SURE is based on the active participation of all Member States in the guarantee system put in place by them in a spirit of solidarity in the Council. This basic political understanding is shared by Member States, as also evidenced by their support for the SURE instrument in the European Council.
The adoption of Council Regulation (EU) 2020/672 establishing SURE is not the end of the story but only the beginning. In the weeks ahead, the political and legal process of committing guarantees to the SURE instrument will take place in Member States. In addition, the Commission will internally prepare to operationalise the instrument so that it can make support for the benet of interested Member States available as soon as possible to help them protect their workers and smoothen the gradual recovery of the EU’s economies. It remains to be seen whether, from a longer term perspective, SURE will eventually serve as a legal precursor for a more permanent EU based scheme that could support employment in case of an economic shock. Such a permanent scheme would have to overcome the difculties linked to entrenched sensitivities in a number of Member States regarding the national design of their social policies and social security systems. Certainly, such an EU led effort would lead to a very vivid legal and policy debate both in academia and EU policy practice.
Finally, the jurisprudence of the CJEU in Pringle on Article 122(1) TFEU is no impediment for SURE. So far the CJEU has only held that this legal basis cannot be used to nance Member States with severe nancing problems (C-370/12, para 116). Instead, SURE intends to facilitate efforts by Member States to address sudden and severe increases arising from the COVID-19 pandemic in public expenditure related to support for their labour forces, and does so on a temporary basis. Such a mechanism is in line with the purpose of Article 122(2) TFEU. Secondly, the reference in Article 122(1) TFEU to difculties in the provision of certain products, notably in the area of energy, is no impediment either for using the legal basis beyond such a use. It merely reects a codication of an example by the Lisbon Treaty, evidenced by the use of the word ‘in particular’ based on the use previously made of this clause in 2004 and 2006 in order to safeguard gas supply and establish minimum oil stocks by means of EU legal acts.
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A Dwarf in Size, But a Giant in Shifting a Paradigm – The European Instrument for Temporary Support to Mitigate Unemployment Risks (SURE) René Repasi 1
protecting employees and the self‐employed’ and for (2) ‘the nancing, as an ancillary, of some health-related measures, in particular in the workplace’ (Article 1(2) and Article 3(2));
Introduction On 19 May 2020, the Council of the European Union adopted the European instrument for temporary support to mitigate unemployment risks in an emergency (SURE) as Council Regulation (EU) 2020/672. The European Commission chose Article 122(1) and (2) TFEU as the dual legal basis for it. The instrument mobilises 100 billion euros of EU funds in order to assist Member States nancially that set up shorttime work schemes or similar measures for the sake of mitigating the risk of an increased unemployment due to the economic consequences of the lock-down measures that were adopted in order to ght the further expansion of the COVID-19 virus.
• The substantive condition attached to being eligible for nancial assistance is the presence of a sudden and severe increase in ‘actual and possibly also planned public expenditure […] as of 1 February 2020 due to national measures directly related to short‐time work schemes and similar measures to address the socio-economic effects of the exceptional occurrence caused by the COVID-19 outbreak’ (Article 3(1)); • There is no further conditionality attached to the receipt of nancial assistance;
The key features of the new instrument are the following:
• The nancial assistance is renanced by dedicated EU debt issued and administered by the European Commission (Article 8);
• It hands out loans to the Member States concerned (Article 4);
• The nancial risks borne by the EU budget that arise from the loans to Member States are mitigated by voluntary irrevocable, unconditional and on-demand guarantees of the Member States.
• The nancial assistance is strictly earmarked to the exclusive use for (1) ‘short-time work schemes or similar measures aimed at
1. Dr René Repasi is Associate Professor of International and European Union Law at Erasmus University Rotterdam and Director of the Erasmus Centre for Economic and Financial Governance. He is Member of the Editorial Board of EU Law live.
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Its ground-breaking character becomes visible once we ignore the concrete numbers and look at the legal design
Its ground-breaking character becomes visible once we ignore the concrete numbers and look at the legal design of SURE, especially if we compare it to the instruments that the EU came up with during the last economic crisis. SURE overcomes the need for ‘strict policy conditionality’ in return for EU nancial assistance and it establishes a renancing model of loans based on EU debt, which are guaranteed by the Member States
This instrument, which was proposed by the Commission at an early stage (2 April) of the debates on how the EU can mitigate the negative consequences of the economic crisis that will follow the pandemic, is groundbreaking from a political and legal perspective, despite its rather minimalistic economic impact. A Dwarf – Too Small to Have Impact The instrument is limited to 100 billion euros for all EU Member States. Although there are no pre-allocated envelopes for Member States, the share of loans granted to the three Member States representing the largest share of the loans granted shall not exceed 60%. Furthermore, the amounts due by the EU in a given year shall not exceed 10% of the maximum amount of 100 billion euros. Moreover, the Commission intends to, rst, collect requests from all Member States and then decides on the distribution of the funds. Given that the renancing needs of the Member States for overcoming the economic crisis that will follow the pandemic are signicantly higher than 100 billion euros, SURE is economically only a drop in a bucket.
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A Giant – Learning the Lessons from the last Economic Crisis In order to assist Euro area Member States that were experiencing or were threatened by severe nancing problems as a consequence of the nancial crisis of 2008, the Euro area governments established several vehicles: the EU-law European Financial Stabilisation Mechanism (EFSM) of 2010, the private-law special purpose vehicle European Financial Stability Facility (EFSF) of 2010 and the intergovernmental European Stability Mechanism (ESM) of 2012. Financial assistance granted by either of these was subject to strict conditionality in the shape of a macro-economic adjustment programme.
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Such a programme was to be agreed on within a ‘memorandum of understanding’ (MoU) – a legally non-binding text, in which the Member State concerned promised unilaterally certain policy reforms in return for the unilateral promise of the funding vehicle to pay out nancial assistance. A ‘troika’ composed of the European Commission, the IMF and the ECB (‘in liaison’) negotiated the MoU and observed the implementation. The policyconditionality was for a long time seen as the only way a supranational body could nancially assist Euro area Member States without violating the so-called ‘no bailout’ clause of Article 125(1) TFEU. The proponents of ‘conditionality’ are thought to have found the mainstay of their view in the Court’s judgment in Pringle (C370/12). Here the Court of Justice of the European Union (CJEU) stated that ‘Article 125 TFEU does not prohibit the granting of nancial assistance by one or more Member States to a
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The one who pays defines the actual use of the payment
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Member State which remains responsible for its commitments to its creditors provided that the conditions attached to such assistance are such as to prompt that Member State to implement a sound budgetary policy’ (paragraph 137) and later approved the ESM’s rules that subject nancial assistance to strict conditionality as being in line with these requirements: ‘the purpose of the strict conditionality […] is to ensure that the ESM and the recipient Member States comply with measures adopted by the Union […], those measures being designed, inter alia, to ensure that the Member States pursue a sound budgetary policy’ (paragraph 143). Whilst the Court approved strict conditionality – as foreseen by the ESM-Treaty which was the subjectmatter of these proceedings – it never stated that this was the only way the requirements the Court found in Article 125(1) TFEU could be met. The practical implementation of strict conditionality – also known as austerity – created long-
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sistance to the general budget of a Member States, the price for which is not determined by nancial markets anymore, SURE focuses on the purpose of the assistance. If the EU denes narrowly the subsequent use of the nancial assistance by the recipient Member State, the EU resumes the taking of political responsibility for the ow of money into the The new formula: Financial Assistance in territory of this Member State. The budgetary return for Earmarking policy of that Member State is unaffected by an earmarked nancial assistance, as is the SURE overcomes this model by establishing soundness of this budgetary policy. In other a new formula: ‘nancial assistance in return words, because the for earmarking’. In other Member State’s gowords, the one who pays vernment is not free in denes the actual use of SURE establishes a refinanhow to spend the mothe payment. Although ney it receives from SURE is not in conict cing model for the loans the EU, there is no with Article 125(1) that it grants based on own ‘moral hazard’ that TFEU, since it is based EU debt and thus makes use has to be tackled by on Article 122(2) TFEU of the EU’s excellent rating ‘strict policy condiand thus escapes the aptionality’. The plication of the ‘noon the financial markets smoothness by which bailout’ clause, it also had this new instrument to overcome the requireand the new formula ment ‘under certain conit is built on went ditions’ set by Article through the Council indicates that ‘assistance 122(2) TFEU itself. In order to grant EU in return for earmarking’ was able to nd signancial assistance under this legal basis, ‘cernicant political support amongst all Memtain conditions’ must be pre-dened by the ber State governments. Council and linked to the assistance. The EFSM, which was also established on Article Issuing EU Debt to Renance EU Finan122(2) TFEU, met this requirement by estacial Support blishing ‘strict policy conditionality’ – just as the ESM did with a view to get over Article Without calling them ‘Coronabonds’ or even 125(1) TFEU. ‘Eurobonds’, SURE establishes a renancing model for the loans that it grants based SURE understands the requirement in an orion own EU debt and thus makes use of the ginal way, differently to its ‘predecessor’ that EU’s excellent rating on the nancial marwas founded on the basis of Article 122(2) kets. This renancing model is nothing new TFEU. Instead of looking at the ‘moral hain EU law. The EFSM renanced its loans by zard’ that might be triggered by nancial aslasting repercussions in the societies affected by it. The bad reputation of this form of support deters governments de facto from requesting nancial assistance from vehicles that are built on the formula ‘assistance in return for policy conditionality’.
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which is a necessary condition in order to have access to SURE loans without imposing it. Establishing such a voluntary guarantee scheme would not have needed an explicit legal basis in the Treaties because of its voluntary nature. Operating with incentives to join the scheme instead of legally binding commitments shows another aspect of innovation that SURE introduces in terms of design.
own debt (see Article 2(1)(2) of Regulation (EU) 407/2010). The same holds true for the Balance-of-Payments Facility for non-Euro area Member States (see Article 1(2) of Council Regulation (EC) No 332/2002). In earlier times, the Council empowered the Commission to contract loans for the purpose of promoting investment within the Community (see Council Decision 78/870/EEC). The probably – in the meantime – best known example from the past is the 1975 Community Loan Mechanism (see Regulation (EEC) No 397/75). The existence of such EU debt seems to contradict – at rst sight – Article 310(1)(3) TFEU, according to which ‘the revenue and expenditure shown in the [EU] budget shall be in balance’ and Article 17(2) of Regulation (EU) 2018/1046 on the nancial rules applicable to the general budget of the Union, according to which ‘the Union […] shall not raise loans within the framework of the budget’.
Shortcoming I: How Sustainable is SURE? Whilst some may consider the dual legal basis of Article 122(1) and (2) TFEU a strong element of SURE, it can also be seen as a weakness. Article 122 TFEU only applies to situations of ‘severe difculties’. The purpose of SURE – to prevent increasing social disparities between the Member States due to rising unemployment rates – will still remain pertinent once the pandemic and even the worst stages of the upcoming economic crisis are over. But the choice of the legal basis won’t allow for extending SURE into these periods or for transforming it into an Unemployment Reinsurance Scheme. Given the purpose of SURE, it would have been commendable to also base the instrument on Article 175(3) TFEU, which allows for ‘specic actions outside the [Cohesion] Funds’ if necessary to attain the objective set out in Article 174 TFEU, which is the strengthening of the economic, social and territorial cohesion of the EU (see on this the legal basis for the establishment of a European Unemployment Benets Scheme: Repasi 2017, p. 21).
The contradiction between the prohibition of raising loans, on the one hand, and the somehow different practice, on the other hand, can be explained by the fact that, for predened and specic purposes, the EU is allowed to enter into borrowing-and-lending operations. The EU may, however, not do so in order to nance the general EU budget. The ability to enter into borrowing-and-lending operations must therefore be limited to a specic purpose in the legal act enabling the EU to raise loans. Furthermore, the guarantees for these borrowing-and-lending operations have to be included in the general EU budget. Under SURE, the pressure on the EU budget is relieved by a voluntary guarantee scheme by the Member States, the participation in
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tion of the assistance. Only in its capacity as Its ground-breaking the EU’s budgetary authority can it character check on the use of the EU’svisible nancial means bywe the Eubecomes once ignore ropean Commission. Whilst this is already the concrete and look progress compared to numbers the special purpose vehicles that legal were constructed at the design outside the EU legal framework during the last economic crisis, this minimalistic involvement of the European Parliament clearly constitutes a shortcoming of SURE. Whilst keeping legislative procedures short in times of crisis is understandable, the European Parliament has proven that it can act quickly if necessary.
The choice of this legal basis would have made it transparent that SURE is about social cohesion, especially if the latter is understood as ‘the degree to which disparities in social and economic welfare between different regions or groups within the European Union are politically and socially tolerable’ (2). An increase in social disparities within the EU as a consequence of a pandemic is both politically and socially intolerable so that an action on the basis of Article 175(3) TFEU would have been justied. The advantage of this choice of legal basis would not only have been to make the objective of social cohesion more visible and to allow for extending SURE into periods when there are no more ‘severe difculties’, but it would have included the European Parliament in the legislative procedure and, by doing that, enhanced the democratic legitimacy of the instrument.
Outlook: SURE as a nucleus for the European Recovery Plan On 27 May, the European Commission announced its ambitious 750 billion euroRecovery Plan. It includes the issuance of own debt, which is to be secured by Member States’ guarantees and which will be served by new own resources. Access to funding instruments follows – at least in parts to the extent that legislative proposals were accessi-
Shortcoming II: Where is the Parliament? The choice of the legal basis led to an exclusion of the European Parliament in the deni-
Whilst some may consider the dual legal basis of Article 122(1) and (2) TFEU a strong element of SURE, it can also be seen as a weakness
2. Willem Molle, European Cohesion Policy, 2007, p. 5.
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cess. Its design may have paved the way for an ambitious recovery plan, but the choice for grants instead of loans will make SURE economically an unattractive instrument that will hardly be used.
ble at the time of writing – the logic of cohesion funds: earmarking payments and making use of grants instead of loans. It becomes clear from a rst reading of these proposals that many elements that SURE already embodies can be found in the design of the Recovery Plan. As SURE has already found political support in the Council, it can be used as a precedent for gaining political support within the Council for the Recovery Plan.
In sum, with the adoption of SURE, the EU has shown that it has learnt lessons from the management of the last economic crisis. With the formula ‘nancial assistance in return for earmarking’, SURE found a way out of the alleged need for ‘strict policy conditionality’. SURE showed that nancial assistance can be renanced more benecially for all actors involved by issuing EU debt. SURE can therefore certainly be called the pioneer and the door-opener for a truly European scal solution to mitigate together the economic crisis that we will have to face once the pandemic retreats: a dwarf in size, but a giant in shifting a paradigm in the EMU.
The plan goes beyond SURE in that – building on the German-French proposal for a 500 billion euro-recovery plan – it provides for grants, the usage of which will not increase Member States’ annual decit and debt levels. If the possibility to hand out grants survives the upcoming political bargaining process in the European Council, SURE could become the victim of its suc-
The choice of the legal basis led to an exclusion of the European Parliament in the definition of the assistance.
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News Highlights Week 25-29 May 2020 Boosting the fight against ‘revolving doors’ in the EU in times of crisis
EEA Council Meeting and Joint Statement
Monday 25 May By Dolores Utrilla READ MORE ON EU LAW LIVE
Monday 25 May
The ow of politicians and public staff members between the public and the private sector is a matter of concern in the EU. An overview is provided of how the EU is tackling this problem, the remaining challenges and the most recent recommendations of the European Ombudsman in respect of the EBA’s regulation in this eld.
Following the 25th Anniversary of the EEA Agreement, the EEA Council held a video conference that led to the adoption of a Joint Statement on the continuation of the EEA Agreement and its implementation, the effect of COVID-19 in the internal market, the need for continued or more political dialogue in various areas, the European Green Deal, the social dimension of employment matters, and nancial contributions.
Council Decisions on draft measures of Canada-EU Comprehensive Economic and Trade Agreement’s bodies
Pending action commenced by Ighoga Region 10 alleging the Commission’s failure to act in State aid case
Monday 25 May
Monday 25 May
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Ofcial Publication was made of four Council Decisions adopted on the position to be taken on behalf of the EU in the CETA Joint Committee, established under the economic and trade agreement between Canada and the EU and its Member States.
Tartu Agro v European Commission: case seeking annulment of Commission’s decision that it was granted unlawful State aid Monday 25 May
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Ofcial publication was made of the action brought before the General Court by the Estonian company Tartu Agro. By this action the applicant seeks the annulment of a Commission decision that declared State aid SA.39182 that was (to the benet of Tartu Agro) incompatible under the EU State aid rules.
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An action against the Commission brought before the General Court was ofcially published, by which the applicant alleges that the Commission infringed its obligations under the TFEU because it did not take a formal decision in time. The case concerns State aid granted in the sector of construction of residential and nonresidential buildings.
Court of Justice to clarify EU rules on imports of protected species of wild fauna and flora Monday 25 May
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Ofcial publication was made of the German Federal Finance Court’s request for a preliminary ruling in case Hauptzollamt B v XY, concerning the interpretation of EU rules on imports of protected species of wild fauna and ora.
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Contaminant perchlorate in food: maxi- Reforming the European Union: instimum levels set due to risks identified tutional dynamics and a postponed Conference on the Future of Europe by CONTAM reports Monday 25 May
Tuesday 26 May by Anjum Shabbir
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The EU Regulation that sets maximum levels for certain contaminants in foodstuffs was amended. The decision is aligned with two reports from the CONTAM Panel on the risks to public health related to the presence of the contaminant perchlorate in food and conclude that current chronic and short-term exposure to this substance may pose a possible concern for human health.
Special working group within the European Parliament - AFCO, the Constitutional Affairs Committee, exchanged their views on the European Parliament’s role in the Conference on the Future of Europe, on citizens’ participation, and the need for the Council to adopt its common position so that the Conference can be scheduled.
Commission publishes final report on evaluation of the Vertical Block Exemption Regulation
ECtHR: disclosure of medical data in official certificates breaches privacy rights
Tuesday 26 May
Tuesday 26 May
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The European Commission released a report by which it evaluates the functioning of the VBER 330/2010 together with the Vertical Guidelines, aiming to set a basis to decide if the VBER should be amended or prolonged beyond its current expiry date, that is, 31 May 2022.
Japan-EU Leaders’ meeting on COVID19 issues and implementation of the strategic partnership Tuesday 26 May
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The leaders of the EU and Japan held a meeting by video conference to discuss the COVID-19 pandemic and issues related to the EU-Japan Strategic Partnership. Following their meeting, European Council President Charles Michel, European Commission President Ursula von der Leyen, and Japan’s Prime Minister Shinzō Abe issued a joint press release giving an account of the main conclusions.
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The European Court of Human Rights handed down its Chamber judgment in P.T. v. the Republic of Moldova (application no. 1122/12), nding that the applicant’s right to respect for private and family life (Article 8 of the European Convention of Human Rights, ECHR) was breached by the disclosure of his HIV positive status in a certicate exempting him from military service.
Blood relatives and impartiality of judges: ECtHR ruling Tuesday 26 May
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The European Court of Human Rights gave its Chamber judgment in Koulias v. Cyprus, a case concerning the requirement of impartiality of judges under the right to a fair trial in Article 6(1) of the European Convention on Human Rights.
Nº19 · MAY 30, 2020
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Europe’s Moment: Commission Recovery Plan unveiled Wednesday 27 May
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Wednesday 27 May
The European Commission unveiled its proposal for post-pandemic economic recovery in the EU, which relies on two closely intertwined pillars: (i) a special recovery fund, called ‘Next Generation EU’, and (ii) the new long-term EU budget (2021-2027). Together, these instruments make up 1.85 trillion euros to help kick-start the EU economy and ensure Europe bounces back.
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The Council of the EU adopted two decisions to conclude agreements with Montenegro and Serbia on border management cooperation between these countries and the European Border and Coast Guard Agency (Frontex). These agreements will allow Frontex to assist Montenegro and Serbia in border management, carry out joint operations and deploy teams in the regions of these countries that border the EU, subject to the country’s agreement.
Publication of further COVID-19 legislative acts regarding the transport sector, meetings of companies, and assistance to neighbour countries
Temporary derogation from Council’s Rules of Procedure due to the COVID19 outbreak further extended Wednesday 27 May
COVID-19 and EASO: Agency announces resumption of certain operations in Cyprus, Greece, Italy and Malta
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The European Asylum and Support Ofce announced the resumption of certain operations in four Member States (Cyprus, Greece, Italy and Malta), following the suspension of the Agency’s activities (including interviews and registrations) as a consequence of the disruption caused by COVID-19.
A further set of legislative acts were adopted on 25 May 2020 in response to the consequences of the COVID-19 pandemic. This includes inter alia four different acts by the European Parliament and by the Council regarding measures in the transport sector.
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Ofcial publication was made of Council Decision 2020/702 further extending (until 10 July 2020) the temporary derogation from the Council’s Rules of Procedure introduced by Decision 2020/430 and extended by Decision 2020/556 in view of the travel difculties caused by the COVID-19 pandemic in the Union.
Wednesday 27 May Wednesday 27 May
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The ECB published its May 2020 Financial Stability Review (FSR), which provides an overview of potential risks to nancial stability in the euro area. The main conclusion of the FSR is that the impact of the COVID-19 pandemic on the economy has greatly amplied existing vulnerabilities in the nancial sector, corporates and sovereigns. According to the ECB, this may pose a risk to nancial stability.
EU border cooperation agreements with Montenegro and Serbia Wednesday 27 May
European Central Bank: increased risks to financial stability due to COVID-19
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Nº19 · MAY 30, 2020
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EU Courts lack jurisdiction in actions for damages against the Euro Group: AG Pitruzzella’s Opinion Thursday 28 May
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Advocate General Pitruzzella delivered his Opinion in joined Grand Chamber cases Chrysostomides & Co. and Others (C-597/18 P, C-598/18 P, C-603/18 P, and C604/18 P). These four appeal cases concern, inter alia, the question of whether the Euro Group may be classied as an ‘institution’ within the meaning of Article 340 TFEU and, therefore, of whether the CJEU has jurisdiction to hear actions for damages brought against the Euro Group.
Thursday 28 May
General Court rules in favour of Three: annuls Commission decision to block its acquisition of O2
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Thursday 28 May
The General Court gave its judgment in Campbell v Commission (T-701/18), annulling the European Commission’s Decision C(2018) 6642 nal of 4 October 2018, by which the Commission, under Regulation 1049/2001, refused the applicant’s request for access to documents regarding Ireland’s compliance or noncompliance with its obligations under Council Framework Decision 2008/909/JHA, Council Framework Decision 2008/947/JHA, and Council Framework Decision 2009/829/JHA, on different dimensions of the principle of mutual recognition in criminal matters.
AG Hogan: Court has jurisdiction to hear damages action connected to annulment action concerning Counciladopted CFSP restrictive measures Thursday 28 May
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Advocate General Sánchez-Bordona delivered his Opinions in Hungary and Poland v Parliament and Council (cases C-620/18 and C-626/18), suggesting that the Court of Justice should dismiss in full the actions for annulment brought by Hungary and Poland against Directive 2018/957 strengthening posted workers’
Campbell v Commission: General Court clarifies rules on access to EU documents Thursday 28 May
AG Campos Sánchez-Bordona’s Opinion in Grand Chamber case concerning the validity of Directive 2018/957 amending rules on posted workers’ rights
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Advocate General Hogan’s Opinion in Bank Refah Kargaran v Council (C-134/19 P), relating to the General Court’s ruling T-552/15 advises that the Court of Justice of the European Union does have jurisdiction to hear a damages action which is directly connected to an action seeking annulment of restrictive measures adopted by the Council under Chapter 2 of Title V TEU.
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The General Court ruled in favour of Hutchison 3G UK (‘Three’) and against the European Commission, annulling the latter’s decision of 11 May 2016 that the proposed acquisition of Télefonica UK (O2) by Three was unlawful under the EU Merger Regulation.
Council of Europe’s new tool for judicial dialogue in motion: ECtHR issues second-ever advisory opinion Friday 29 May by Dolores Utrilla
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For the second time ever, the European Court of Human Rights delivered an advisory opinion under the new reference mechanism established by Protocol No. 16 to the European Convention on Human Rights. The opinion, handed down at the request of the Constitutional Court of Armenia, brings to the limelight a still largely unknown tool which presents signicant parallels with other judicial dialogue instruments (mainly, the preliminary reference mechanism under EU law), but which is also distinguished by certain unique features.
Nº19 · MAY 30, 2020
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AG Szpunar: Opinion in a case on the Returns Directive and the withdrawal of social assistance in a case where a return decision has suspensive effect Friday 29 May
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Advocate General Szpunar issued his Opinion in B. v Centre public d’action sociale de Liège (CPAS) (C233/19), in a case examining the impact of suspensive effect of an appeal against a return decision ordering a third country national with a serious illness to leave the Member State’s territory, where social assistance has been withdrawn, in particular in the light of Articles 5, 13 and 14(b) of Returns Directive 2008/115.
Agreement for the termination of Bilateral Investment Treaties now officially published Friday 29 May
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The Agreement for the termination of Bilateral Investment Treaties (BITs) between the Member States of the EU was published, as signed by 23 of the EU Member States (with the exception of Austria, Finland, Sweden and Ireland) on 5 May 2020. It will terminate existing intra-EU BITs between the signatory States, including their sunset clauses.
Analyses & Op-Eds Member States’ actions for damages against the EU as a means to offset shortcomings of effective judicial protection? Czech Republic v Commission by Dolores Utrilla
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Analysis of the context and meaning of the pending action for damages in T-151/20, an extremely interesting and pioneering case, the rst known so far in which an action for damages is brought against the EU by a Member State. The author explains why this case offers the EU courts the opportunity to clarify whether and how actions for unjust enrichment can contribute to enhance effective judicial protection in areas, such as that of the EU’s system of traditional own resources (TOR), where serious shortcomings for access to court exist.
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An Infringement of Democracy in the EU Legal Order By David Krappitz and Niels Kirst
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Op-Ed that explores the extent to which the EU can operationalise the value of democracy enshrined in Article 2 Treaty on European Union (TEU) and protect it within the Member States, looking at the Commission’s approach as Guardian of the Treaties, the protection the Court of Justice can offer, and the potential normative value of Article 10(2) TEU.
Nº19 · MAY 30, 2020
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Library - Book Review JURGITA MALINAUSKAITE
By Patricia Pérez Fernández
Springer, 2020, 272 pp.
Harmonisation of EU Competition Law Enforcement
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Review of Jurgita Malinauskaite’s latest work, which analyses the development of public and private European competition law enforcement from a historical and legal perspective. The book explains how both ways of enforcing competition law in the EU have been harmonised, albeit not in parallel. A study that adds a lot of value in the analysis of the evolution of EU Competition Law enforcement over recent decades towards a more harmonised approach throughout the EU.
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