Measures taken to support the European economy in face of the coronavirus crisis

EU measures covid-19

The European Commission (EC) is coordinating a common European response to the outbreak of COVID-19. The European Commission and European Central Bank (ECB) are taking resolute action to reinforce our public health sectors and mitigate the socio-economic impact in the European Union.

Here is a message from President of the European Commission – Ursula von der Leyen, on the latest measures to address the coronavirus.

ECB announces €750 billion Pandemic Emergency Purchase Programme
European Central Bank announced new Pandemic Emergency Purchase Programme (PEPP) which will have an overall envelope of €750 billion. Purchases will be conducted until the end of 2020 and will include all the asset categories eligible under the existing asset purchase programme (APP). Read more here.

European Commission economic response
European Commission has proposed to activate the general escape clause of the Stability and Growth Pact (SGP) as part of its strategy to respond quickly, forcefully and in a coordinated manner to the coronavirus pandemic. Once endorsed by the Council, it will allow Member States to undertake measures to deal adequately with the crisis, while departing from the budgetary requirements that would normally apply under the European fiscal framework. Read more here.

Next quarter VAT payments deferred in UK

Rishki Sunak announced VAT deferring

On March 20, 2020 UK Chancellor of the Exchequer Rishi Sunak announced about large aid for UK business and employees.

This is video with full announcement:

Here are some important citation from this announcement:

“<..>Today I can announce it for the first time in our history the government is going to step in and help to pay people’s wages. We’re setting a new coronavirus job retention scheme.
Any employer in the country. Small or large, charitable or non-profit will be eligible for the scheme. Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furlough and kept on payroll rather than being laid off.
Government grants will cover 80% of the salary of retained workers up to a total of 2,500 pounds a month. <..> Scheme will cover the cost of wages back dated to March 1st and will be open initially for at least three months<..>”

“<..>I can announce today that the coronavirus business interruption loan scheme will be interest-free for 12 months<..>”

“<..>I am also announcing today further cash flow support through the cash tax system to help businesses pay people and keep them in work I am deferring the next quarter of VAT payments. That means no business will pay no VAT from now until the end of June. And you’ll have until the end of the financial year to repay those bills<..>”

“<..>That is a direct injection of over 30 billion pounds of cash to businesses equivalent to 1.5% of GDP<..>”