This regular alert covers key regulatory EU developments related to the COVID-19 situation. It does not purport to provide an exhaustive overview of developments and contains no analysis or opinion.
LATEST KEY DEVELOPMENTS
Competition & State Aid
- European Commission responds to concerns regarding pandemic-related State aid support
- European Commission distributes pre-financing under Recovery and Resilience Plans to an additional 3 Member States
- European Commission approves new and amended Member State measures to support the economy
Trade / Export Controls
- European Commission reports on effective use of EU trade defense instruments (TDIs) during COVID-19 pandemic
Medicines and Medical Devices
- European Commission and AstraZeneca resolve dispute over COVID-19 vaccine supply
Cybersecurity, Privacy & Data Protection
- European Commission adopts EU Digital COVID Certificate equivalence decisions for Turkey, North Macedonia, and Ukraine
COMPETITION & STATE AID
On 20 August 2021, Commission Vice-President and Competition Commissioner Margrethe Vestager replied to a written question from June 2021 by Sara Skyttedal, a Member of the European Parliament ("MEP"), on potential distortions to the market arising from continued State aid support in a post-pandemic Europe.
In particular, MEP Skyttedal, expressed her belief that since certain Member States and sectors already enjoy tremendous advantages through "wealth or influence", State aid would allow them to invest in particular industries and raise the risk of distorting the market. MEP Skyttedal indicated that hypothetically, State aid could result in monopolies that would sideline smaller Member States, research institutions, organizations, and SMEs and start-ups that lack similar weight.
In response, Commissioner Vestager indicated the Commission's view that effective State aid control is key to a sustainable and rapid recovery, as this aims to ensure that aid complements private investments, instead of duplicating these or suppressing incentives to innovate. She also expressed the Commission's position that EU State aid rules apply in the same way to all Member States and that equal treatment is a key principle of State aid rules, including in relation to aid provided by Member States in the COVID-19 context.
Commissioner Vestager further stated the Commission's view that it "closely monitors" the provision by Member States of COVID-19-related State aid relief and that "to date, it has not observed Member States disproportionately outspending each other or compared to the economic damage of COVID-19." She also cited safeguards under EU law in relation to dominant positions, as well as Commission initiatives that seek to promote SMEs.
Furthermore, Commissioner Vestager noted that the Commission is preparing a strategy to phase out extraordinary crisis support, as soon as feasible under the economic situation.
As of 6 September 2021, an additional 3 Member States received prefinancing disbursements from the Commission (Denmark (€201 million); France (€5.1 billion), Germany (€2.25 billion)) under the Recovery and Resilience Facility (RRF) towards boosting their economies and recovering from the COVID-19 fallout. This follows the preceding first set of disbursements to Belgium (€770 million); Greece (€4 billion); Italy (€24.9 billion); Lithuania (€289 million); Luxembourg (€12.1 million); Portugal (€2.2 billion); and Spain (€9 billion)). These sums are equivalent to approximately 13% of the respective countries' financial allocations.
The Commission will subsequently authorize additional disbursements based on satisfactorily fulfilling the milestones and targets, as set out in each of the Council Implementing Decisions, concerning investments and reforms covered in each Member State's Recovery and Resilience plan. The total amounts foreseen for these initial Member States receiving pre-financing are €5.9 billion (Belgium); €1.5 billion (Denmark); €39.4 billion (France); €25.6 billion (Germany); €30.5 billion (Greece); €191.5 billion (Italy); €2.2 billion (Lithuania); €93.4 million (Luxembourg); €16.6 billion (Portugal); and Spain (€69.5 billion).
The disbursements follow the adoption of the initial set of Council Implementing Decisions, allowing up to 13% pre-financing, for the approval of national Recovery and Resilience plans for 16 Member States (Austria, Belgium, Croatia, Cyprus, Denmark, France, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, Portugal, Slovakia, Slovenia and Spain), who received the first green lights for use of EU recovery and resilience funds in July 2021 (see here).
Following positive assessments on 6 September 2021, Council approvals are expected shortly for 2 additional Member State Recovery and Resilience plans, as earlier approved by the Commission: Czechia (€7 billion) and Ireland (€989 million).
To recall, the Member State plans set out the reforms and public investment projects foreseen for implementation with the support of the RRF, the key component of NextGenerationEU, the EU's plan for rebounding from the COVID-19 crisis. The RRF will provide up to €672.5 billion to finance reforms and investments (i.e., grants totaling €312.5 billion and €360 billion in loans).
7 Member State plans also remain pending Commission approval (see here), with the following total amounts requested under the RRF: Estonia (€982.5 million); Finland (€2.1 billion); Hungary (€7.2 billion); Malta (€316.4 million); Poland (€23.9 billion); Romania (€29.3 billion); and Sweden (€3.2 billion).
Commission assessment of plans. In evaluating the Member State plans under the criteria set out in the RRF Regulation, notably, the RRF guidelines make clear that the investment projects included in Member State recovery plans must comply with State aid rules.
The Commission published practical guidance for swift treatment of projects under State aid rules, as well as a number of sector-specific templates to help Member States design and prepare the State aid elements of their recovery plans (Jones Day Commentary, "EU Member State COVID-19 Recovery Plans Must Comply with State Aid Rules," March 2021, see here).
The Commission's appraisal of Member State plans will also, in particular, determine whether the plans dedicate at least 37% of expenditure to investments and reforms that pursue climate objectives and 20% to the digital transition.
Member State plans pending submission. The Commission will continue to closely engage with the 2 remaining Member States (i.e. Bulgaria and The Netherlands) to deliver robust national recovery plans. While Member States were invited to notify their plans before 30 April 2021, they may do so until mid-2022.
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