EU Insight, 8 May 2020

COMMISSION PREDICTS GREATEST ECONOMIC SHOCK EVER FOR THE EU ECONOMY

The Commission published its spring economic forecast, which provides the first Commission overview of the economic outlook for the EU amid the COVID-19 pandemic. The forecast projects a contraction of the EU economy by 7.4% this year, and a rebound by around 6.1% in 2021. Overall, the projections show that the upcoming economic recession will be the deepest in the EU’s history, and no full recovery is expected in the short term. The study also finds that the economic consequences of the crisis will be asymmetric across the Member States. On a more positive note, financial stability has been preserved and banks are expected to withstand the recession.

EU LEADERS REAFFIRM SUPPORT TO WESTERN BALKANS DURING VIRTUAL SUMMIT

This week, EU leaders and the leaders from the six Western Balkans partners (Albania, Bosnia and Herzegovina, Serbia, Montenegro, the Republic of North Macedonia and Kosovo) convened via videoconference for the EU-Western Balkans Zagreb summit. At the summit, EU leaders reaffirmed their unequivocal support for the European perspective of the Western Balkans and stressed the importance of good neighbourly relations, regional stability, and mutual cooperation. COVID-19 was also on the agenda, after the EU announced the provision of €3.3 billion in short term assistance, and support for the recovery strategy in the region in the longer term.

ECB STRESSES BOND-BUYING PROGRAMME IS LEGAL AFTER GERMAN COURT RULING

After the German Constitutional Court asked the European Central Bank (ECB) to provide a proportionality assessment showing that its bond buying programme on government bonds (PSPP) is in line with its price stability mandate, the Frankfurt-based institution noted that the Court of Justice of the EU had approved the programme in December 2018. ECB Vice-President Luis de Guindos, during an exchange of views with the European Parliament’s ECON Committee, said that “the ECB is a European institution and we are subject to the legal framework of the EU and that we are under the jurisdiction of the European Court of Justice.”

ANTI-MONEY LAUNDERING ACTION PLAN OUTLINES WAY FORWARD FOR EU RULEBOOK

The European Commission published its Action Plan on Anti-Money Laundering, together with a new methodology for the identification of high-risk third countries and the Delegated Regulation on third-country jurisdictions which have strategic deficiencies in anti-money laundering/counter terrorist financing. The new Action Plan outlines the six pillars, aiming to ensure that EU rules are more harmonised and applied more effectively, while also strengthening the EU’s global role in this area. The new methodology aims to improve the identification process of high-risk third countries, through increasing clarity and transparency. Finally, the updated list contains new high-risk third countries that have been added, while other countries have been removed.

COMMISSION RAISES €7.4 BILLION DURING COVID-19 VACCINE PLEDGING EVENT

Following calls to action by the World Health Organisation and a group of health actors, the Commission decided to join forces with global partners to host a pledging event – the Coronavirus Global Response Initiative. Following the launch of the initiative, the Commission registered €7.4 billion in pledges from donors from all around the world. This amount includes a pledge of €1.4 billion by the Commission itself. The funds raised during the event will be used to ensure the collaborative development and universal deployment of diagnostics, treatments and vaccines against COVID-19.

COMING UP NEXT WEEK

• 12 May: Video conference of defence ministers. On the agenda: implications of the COVID-19 pandemic on security and defence.
• 12 May: Video conference of ministers of health. On the agenda: impact of the COVID-19 outbreak on access to medicines.
• 12-14 May: European Parliament plenary session. On the agenda: Next MFF, own resources and recovery plan, use of contract tracing apps, vaccines development.
• 13 May: Video conference of agriculture and fisheries ministers. On the agenda: stocktake of measures taken to date to mitigate impact of COVID-19.
• 13 May: Video conference of the European Union Military Committee.
• 15 May: Video conference of foreign affairs ministers.
• 15 May: Video conference of ministers responsible for industry and the internal market.

Karl Isaksson, Managing Partner Brussels, Kreab