The EU will pull out all the stops to help national capitals fight coronavirus, waiving debt limits and state-aid prohibitions and helping to redirect vital medical equipment to hard-hit areas, Commission President Ursula von der Leyen said Friday.
The pledge of fast and forceful assistance — particularly for Italy, which is the EU country hardest hit by the virus — was part of an effort to portray Brussels as taking decisive action after weeks in which officials seemed to be caught flat-footed, and struggled to coordinate the responses of national governments that moved swiftly to protect their own citizens but bickered over how to muster a collective European response to what is now recognized as the worst public health threat in modern times.
Appearing with two of her executive vice presidents, Margrethe Vestager, who oversees competition rules, and Valdis Dombrovsksis, who oversees economic policy, von der Leyen warned that the worst of the pandemic — and its accompanying economic fallout — had yet to hit. And she urged governments and citizens to take steps to slow the contagion.
“We are just at the beginning,” von der Leyen said. “It is not possible to stop the virus, but it is possible and of utmost importance to slow down the spread of the virus. That is doable.”
Von der Leyen also responded to some criticism that the EU and some member countries had been slow to help Italy. She said she had convinced France and Germany to ease restrictions they had imposed on the exports of protective equipment and that the Commission was working to facilitate fast delivery of such materials to strapped health care systems.
“The Commission is also taking all necessary steps to ensure an adequate supply of protective equipment all across Europe,” she said. “I want to be very clear: the single market has to function. It is not good when member states take unilateral action.”
Von der Leyen also said that because it was impossible to know which EU country would suffer most after Italy, that it was a test for everyone to show solidarity with Rome. “We are absolutely ready to help Italy with whatever is necessary,” she said. “This is of utmost importance. This country is severely hit by coronavirus and we all know they need help right now.
“We set an example right now to help the Italian people, to help the Italian government,” she added. “We are all, in this moment, Italians.”
A day after European Central Bank President Christine Lagarde disappointed financial markets by saying that EU national governments should lead the response to the crisis, von der Leyen sought to assure citizens that the Commission was moving as quickly as possible to help capitals, with a general lifting of borrowing limits for expenses related to the coronavirus response.
“It is a major shock for the global and European economy,” von der Leyen said. “We have to take decisive and bold actions now.” She added, “The shock is temporary but we must work together to make sure it is as short and as limited as possible.”
Vestager said that governments should take urgent acton to prop up businesses and help individuals, and she laid out various ways they could do that without violating the rules of the EU’s single market, including by delaying the collection of corporate taxes and value-added tax, or by compensating citizens for tickets to events that have been canceled because of the virus.
“Our goal here is to make sure businesses have the liquidity they need to keep operating,” Vestager said.
Dombrovskis said that officials needed to prioritize the emergency response over fiscal stimulus, and that his hope was the shock to the EU’s economy ultimately would prove to be a temporary one.
“We need to finance this crisis response but what’s important is we need at this time to provide all the necessary liquidity to our companies,” he said, emphasizing the needs of small and medium-sized business. “In this situation companies will start to go out of business or start to lose production capacity,” he said.
The officials also tried to project a reassuring message of calm and control, for a public that has grown increasingly anxious in the face of tightening restrictions on public gatherings, widespread school closures and a fast-growing tally of confirmed cases and deaths.
“We are all in this together,” Dombrovskis said. “Our economies are fundamentally solid and robust enough to survive this temporary situation.”
But at a technical briefing that followed the news conference by leaders, Commission officials acknowledged that the estimates of the economic impact of the virus were little more than educated guesswork, and that it was impossible to know how the situation would play out in the longer term.
While the officials urged citizens to help contain the virus by following precautionary measures, von der Leyen stressed that scientific evidence and common sense should prevail, and she appeared to take a jab at U.S. President Donald Trump for his unilateral imposition of a travel ban from the EU’s Schengen zone.
She said some restrictions may be needed, but “general travel bans are not seen as more effective by the World Health Organization.”