European Union

Government and institution measures in response to COVID-19.

Government and institution measures in response to COVID-19.

Return to homepage  |  Last updated: 18 November, 2020

General measures

The EU’s response to COVID-19

EU leaders have agreed on the following four priority areas at EU as level:

  • limiting the spread of the virus
  • ensuring the provision of medical equipment
  • promoting research for treatments and vaccines
  • supporting jobs, businesses and the economy.

With respect to the fourth priority above, on 23 April 2020, EU leaders endorsed a €540 billion package of three safety nets for workers, businesses and member states. The package consists of:

  1. €100 billion - Support to mitigate unemployment risks in an emergency (SURE)
  2. €200 billion - Pan-European guarantee fund for loans to companies (European Investment Bank)
  3. €240 billion - Pandemic crisis support for member states (European Stability Mechanism)

The EU also took action to redirect EU funds to help member states:

  • €37 billion from structural funds to support EU countries and their citizens in their fight against the outbreak
  • up to €800 million through the EU Solidarity Fund, which has been amended to provide support to member states affected by public health crises like the one caused by COVID-19
  • additional €3.1 billion unlocked from the 2020 budget to respond to the COVID-19 crisis

The EU has also increased flexibility in the use of structural funds, which allows member states to transfer money between different funds and regions to meet their needs in mitigating the social and economic damage of the pandemic. Member States can also request up to 100% financing from the EU budget for initiatives dealing with the impact of the COVID-19 outbreak.

The EU is applying the full flexibility of EU fiscal rules to help member states’ authorities to support healthcare systems and businesses and to maintain employment during the crisis.

EU state aid rules have also been relaxed so that governments can provide liquidity to the economy.

Coronavirus response

EU leaders also agreed to work towards establishing a recovery fund, based on an updated proposal for the next long-term EU budget (Multiannual Financial Framework - MFF).

  1. SURE initiative adopted: €100 billion to keep people in jobs and businesses running
    On May 19, 2020, Member States agreed on the SURE initiative, which will become operational once all Member States have committed and signed their guarantee agreements with the Commission.
    1. SURE is a new instrument that will provide up to €100 billion in loans to countries that need it to ensure that workers receive an income and businesses keep their staff. This allows people to continue to pay their rent, bills and food shopping and helps provide much needed stability to the economy.
    2. The loans will be based on guarantees provided by Member States and will be directed to where they are most urgently needed. All Member States will be able to make use of this but it will be of particular importance to the hardest-hit.
    3. SURE will support short-time work schemes and similar measures to help Member States protect jobs, employees and self-employed against the risk of dismissal and loss of income. Firms will be able to temporarily reduce the hours of employees or suspend work altogether, with income support provided by the State for the hours not worked. The self-employed will receive income replacement for the current emergency.

      COVID-19: Council adopts temporary support to mitigate unemployment risks in an emergency (SURE)
  2. European Investment Bank (EIB) Pan-European guarantee fund for loans to companies
    On April 16 the EIB Board approved a €25 billion European guarantee fund with the goal to deliver up to €200 billion in support of the real economy, with a focus on small and medium-sized companies. The €25 billion guarantee fund will be funded by EU Member States pro rata to their shareholding in the EIB and/or other institutions.
    Coronavirus outbreak: EIB Group’s response

  3. European Stability Mechanism: Pandemic crisis support for member states 
    1. In the euro area, the European Stability Mechanism (ESM) is equipped with instruments that could be used, as needed, in a manner adapted to the nature of the symmetric shock caused by COVID 19.
    2. The Eurogroup proposed to establish a Pandemic Crisis Support, based on the existing ECCL precautionary credit line and adjusted in light of this specific challenge, as a relevant safeguard for euro area Member States affected by this external shock.
    3. The ESM Pandemic Crisis Support was endorsed by the European Council on 23 April.
    4. On 8 May, the Eurogroup agreed on the details of to this credit line, which was made operational by the ESM Board of Governors on 15 May 2020.
    5. The Pandemic Crisis Support is available to all euro area Member States for amounts of 2% of the respective Member’s GDP as of end-2019, to support domestic financing of direct and indirect healthcare, cure and prevention-related costs due to the COVID-19 crisis.

      ESM pandemic crisis support
      Eurogroup Statement on the Pandemic Crisis Support 

Additional measures to support the agri-food sector

On April 23, 2020 the Commission announced additional exceptional measures to further support agricultural and food markets most affected, including:

  • Granting private storage aid for dairy and meat products, which will lead to a decrease of available supply on the market and rebalance the market on the long-term;
  • Introducing flexibility in the implementation of market support programs for wine, fruits and vegetables, olive oil, apicultures and the EU’s school scheme;
  • Exceptional derogation from EU competition rules applicable to the milk, flowers and potatoes sectors, allowing them to collectively take measures to stabilize the market. 

Council of the EU adopted measures for immediate release of funds

  • The Council, on March 30, adopted two legislative acts to quickly release funding from the EU budget for tackling the COVID-19 crisis. One of the acts amends the rules of the structural and investment funds, while the other extends the scope of the EU Solidarity Fund.
  • The Coronavirus Response Investment Initiative gives member states access to €37 billion of cohesion money to strengthen healthcare systems, as well as support small and medium-sized enterprises, short-term working schemes, and community-based services.
  • Of the total, about €8 billion comes from unspent pre-financing in 2019 under the structural funds. The new measure allows member states to spend unused money to mitigate the impact of the pandemic instead of returning it to the EU budget. Another €29 billion is disbursed early from allocations which would have been due later this year.
  • Member states also have greater flexibility to make transfers between cohesion policy programs in order to redirect resources to where they are most needed.
  • The Council also amended the scope of the EU Solidarity Fund to include public health emergencies in addition to natural disasters.

    COVID-19 - Council adopts measures for immediate release of funds

Temporary State Aid Framework

On March 19, 2020, following consultation with EU Member States, the European Commission adopted a Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak. The Framework sets out temporary State aid measures that the European Commission considers compatible with the EU internal market and that can be approved rapidly upon notification by each Member State. The Framework provides for five types of aid:

  • Direct grants, selective tax advantages and advance payments, up to EUR 800,000 to a company to address its urgent liquidity needs.
  • State guarantees for loans taken by companies from banks, to ensure banks continue to provide loans to the customers who need them.
  • Subsidized public loans to companies, i.e. loans with favorable interest rates to help businesses cover immediate working capital and investment needs.
  • Safeguards for banks that channel State aid to the real economy, in particular support for small and medium-sized companies. It is noted that such aid is considered as direct aid to the banks' customers, not to the banks themselves.
  • Short-term export credit insurance.

On April 3, 2020, the European Commission announced the extension of the EU's State aid Temporary Framework to add additional measures to support the economy in the context of the coronavirus outbreak. The five additional measures are:

  • Targeted support in the form of deferral of tax payments and/or suspensions of employers' social security contributions to help avoid lay-offs due to the coronavirus crisis in specific regions or sectors that are hardest hit by the outbreak.
  • Targeted support in the form of wage subsidies for employees to help avoid lay-offs due to the coronavirus crisis in specific regions or sectors that are hit hardest by the outbreak.- More support for coronavirus related research and development (R&D) to address the current health crisis.
  • More support for the construction and upgrading of testing facilities for products relevant to tackle the coronavirus outbreak, such as vaccines, medical equipment or devices, protective material and disinfectants.
  • More support for the production of products relevant to tackle to coronavirus outbreak, such as vaccines, medical equipment or devices, protective material and disinfectants.

On May 8, 2020, the European Commission adopted a second amendment to extend the scope of the State Aid Temporary Framework. This second amendment complements the types of measures already covered by the Temporary Framework and existing State aid rules, by setting out criteria based on which Member States can provide recapitalizations and subordinated debt to companies in need, whilst protecting the level playing field in the EU. 

  • On June 29, 2020, the European Commission adopted a third amendment to extend the scope of the State Aid Temporary Framework. The third amendment allows Member states to i) aid micro and small companies which were already in financial difficulty on December 31, 2019 and ii) provide incentives for private investors to participate in coronavirus-related recapitalisation measures.
  • On October 13, 2020, the Commission announced its decision to prolong all sections of the Temporary Framework for six months, i.e. until June 30, 2021, and the section to enable recapitalisation support for three months, i.e. until September 30, 2021.This fourth amendment also includes provisions to:
    • enable Member States to contribute, on a temporary basis, to the fixed costs of companies that are not covered by their revenues (up to a maximum of EUR 3 million per undertaking). The measure is intended to support companies facing a decline in turnover during the eligible period of at least 30% compared to the same period of 2019 due to the coronavirus outbreak.
    • adapt the conditions for recapitalisation measures under the Temporary Framework, in particular for the State's exit from enterprises where the State was an existing shareholder prior to the recapitalisation, through an independent valuation, whilst maintaining the safeguards to preserve effective competition in the Single Market.
  • As at October 13, 2020, the European Commission had approved over 250 State Aid Measures adopted under the Temporary Framework and Article 107(2)b TFEU. Among those measures, tax related schemes include a French scheme deferring the payment of certain tax by airlines, a German scheme providing tax advantages including tax allowance, tax base reduction, tax deferment, and tax rate reduction and an Italian schemes to support companies and self-employed workers affected by coronavirus outbreak.

The European Commission also published guidance on customs issues relating to the COVID-19 pandemic. In particular, questions have emerged concerning the application of customs provisions relating to the customs decision-making process, customs procedures and customs formalities and the guidance identifies a number of existing provisions that provide solutions in these exceptional circumstances. Further details on customs-related measures are available below.


European Commission : 
State aid: Commission prolongs and expands Temporary Framework to further support companies facing significant turnover losses
State aid

Recovery Plan for Europe

  • On July 21, 2020, the European Council reached agreement on the European Commission’s proposal for an emergency European Recovery Instrument – Next Generation EU, allowing the Commission to borrow up to EUR 750 billion on the markets.
  • The funds may be used for back-to-back loans and for expenditure channeled through the multiannual financial framework (MFF – the EU’s seven-year budget).
  • The funds raised will be allocated (EUR 390 billion in grants and EUR 360 billion in loans) to seven individual programmes, across three pillars.
    • Cohesion, resilience and values
      • Cohesion policy funds ReactEU;
      • Recovery and Resilience Facility;
      • Union civil protection mechanism (RescEU).
    • Single market, Innovation and digital:
      • Horizon Europe;
      • InvestEU;
    • Natural resources and environment:
      • Rural Development;
      • Just Transition Fund (JTF);
  • More flexible emergency tools: flexibility of the EU budget will be provided through the Single Margin Instrument (SMI) that will provide additional financial means to respond to specific unforeseen events.
  • EU leaders also agreed on three thematic special instruments to provide additional financial means for specific unforeseen events:
    • Brexit Adjustment Reserve to support the member states and economic sectors hardest hit by Brexit (EUR 5 billion)
    • European Globalisation Adjustment Fund to support workers who lose their jobs in restructuring events linked to globalisation (EUR 1.3 billion)
    • Solidarity and Emergency Aid Reserve (SEAR) to respond to emergency situations resulting from major disasters in member states and accession countries, and for rapid response to specific emergency needs within the EU or in third countries (EUR 1.2 billion)
  • The repayment by the Commission is scheduled until December 31, 2058 at the latest. The budget proposal includes a number of new own resources, which will include:
    • Phase 1: a non-recycled plastic waste based contribution -  to apply from January 1, 2021;
    • Phase 2: a Carbon Border Adjustment Mechanism and a digital levy – to be introduced by January 1, 2023;
    • Phase 3: a EU Emission Trading System;
    • Phase 4: other new own resources, for example, a financial transactions tax.
  • The new digital levy will be considered if no global agreement is reached and would build on the work done by the OECD. A proposal on a digital levy will be put forward in the first semester of 2021, with a view of its introduction at the latest by January 1, 2023. 

Next steps

  • The Council will negotiate with the European Parliament in order to ensure finalisation of the work on all legal acts in accordance with the relevant legal basis.

Taxation Measures

Postponement of filing deadlines, including for EU mandatory disclosure rules (DAC6)

  • On June 3, 2020, the Council (formally) adopted the amendments to the Directive on Administrative Cooperation (DAC) allowing member states an option to defer by up to six months the time limits for the filing and exchange of the following information:
    • automatic exchanges of information on financial accounts of which the beneficiaries are tax residents in another member state (CRS/ DAC2 – three months deferral);
    • mandatory disclosure requirements (MDRs) for intermediaries and relevant taxpayers under (DAC6 – six months deferral).

The amendment - Council Directive (EU) 2020/876 of June 24, 2020 (hereinafter “the DAC6 Deferral Directive”), entered into force on June 27, 2020. With respect to DAC6 (MDR), the amendments as adopted give EU Member States the option to delay the deadlines for filing information on reportable cross-border arrangements by up to six months, as follows:

  • by February 28, 2021 (previously August 31, 2020) for arrangements where the first step was implemented between June 25, 2018 and June 30, 2020 (so-called “historical arrangements”).
  • the start date for the 30 days reporting deadline to begin by January 1, 2021 (originally July 1, 2020). This will also apply with respect to cross-border arrangements for which the reporting trigger occurs between July 1, 2020 and December 31, 2020. The deadline for a reportable cross-border arrangement that is made available for implementation or is ready for implementation, or where the first step in its implementation has been made during the deferral period will therefore be the end of January 2021.
  • April 30, 2021, for the first periodic report on marketable arrangements.

Most Member States opted for a six-month deferral of reporting deadlines under DAC6, with the notable exceptions of Austria (three-month extension), Finland and Germany (no deferral).

  • On July 29, 2020, the legal documents postposing the entry into application of the value added tax (VAT) e-commerce package by six months have been published in the Official Journal of the European Union — that is, the rules will apply as of July 1, 2021 instead of January 1, 2021.


  • Press release
  • Political agreement
  • Euro Tax Flash from KPMG’s EU Tax Centre

Customs Measures

Duty relief for medical equipment

  • Relief from import duties and VAT exemption on importation granted for goods needed to combat the effects of the COVID-19 outbreak during 2020 (European Commission Decision (EU) 2020/491 of 3.4.2020, amended on 23.7.2020)
  • Goods exempted: protective equipment, testing kits or other medical devices (e.g. as ventilators) intended for the following uses:
    • distribution free of charge by the bodies and organizations to the persons affected by or at risk from COVID-19 or involved in combating the COVID-19 outbreak,
    • being made available free of charge to the persons affected by or at risk from COVID-19 or involved in combating the COVID-19 outbreak while remaining the property of the bodies and organizations,
  • The goods are imported for release for free circulation by or on behalf of State organizations including State bodies, public bodies and other bodies governed by public law or by or on behalf of organizations approved by the competent authorities in the Member States
  • The relief from import duties and VAT exemption was initially applicable on goods imported from 30 January 2020 until 31 July 2020. Under the European Commission Decision of 23.7.2020 the relief was extended (uninterrupted) to 31 October 2020.
  • The Commission published an indicative list of goods that Member States can decide to approve to be imported free of import duties and VAT under Commission Decision (EU) 2020/491.

Guidance on Customs issues (1 April 2020 updated: June 19, 2020)

  • DG TAXUD published guidance (Communication 2020/C 108 I/01 of 1 April 2020) on solutions available under the EU legal framework
  • The guidance aims to ease the work of Member State customs authorities, and other relevant stakeholders, when dealing with customs procedures
  • The topics covered by the guidance are the following:
    • E-commerce  / Empowerment for customs representation;
    • Customs decisions (i.e. new applications for customs decisions and extension of the time-limit to take decisions on applications already submitted) 
    • Customs Debts and Guarantees (i.e. possibility to take into account economic operators’ serious difficulties, exceeding the guarantee limits, use of digital signature for the purpose of undertaking);
    • Entry of goods (e.g. minimizing formalities on the import of human organs and bone marrow destined for transplant in the EU);
    • Origin of goods (i.e. submission of proof of preferential origin during the COVID-19 crisis)Customs procedures (e.g. goods in temporary storage for longer than 90 days);
    • Transit;
    • Special procedures (e.g. temporary admission procedure, possibility to extend the limit for re-exporting the goods under temporary admission, inward processing procedure);
    • Exit of goods
  • An update of 8 April provides clarifications on the submission of proof of preferential origin, in particular with regard to the impossibility for some EU Member States and EU preferential trade partners to provide origin certificates in due form (i.e. signed, stamped and in the right paper format)
  • The Commission proposes several solutions (e.g. possibility to accept copies of certificates). This approach is described in another information note and will start to be operational after further confirmation by the Commission services
  • An update of 27 April provides clarifications on the following points:
    • Customs Debts and Guarantees: the 3 year-period set out in Article 103 UCC for  notifying the customs debt cannot be extended
    • Payment Facilities: the legislative framework of the UCC does not offer a legal basis  to provide for a general deferral of the time limits for payment of customs duties or a  suspension of recoveries of those duties, due to this crisis.
      • Indeed, there can be no systematic recourse to the notion of force majeure.
      • Member States could use, all legal means to apply flexibility, up to the limits allowed  the UCC, during this crisis. The Communication provides further explanations of the  limits of each relevant article of UCC (e.g. serious economic and social difficulties,  other payment facilities, ...)
    • Possibility to use designated places for temporary storage of goods (i.e.  additional temporary storage facilities as places where goods in temporary storage  may be stored until the authorisations have been granted or amended)
    • The UN Office for the Coordination of Humanitarian Affairs (OCHA) database related  to the importation and Customs clearance of goods in the response to COVID-19 is  available.

An update of 19 June states the following : Customs offices en route or destination can authorise the continuation of a TIR transport even if the validity period of the approval certificate for the road vehicle or the container for the transport of goods under customs seal is exceeded. In this case, the holder should be in a position to justify that they requested the renewal of the certificate from the competent national authority at departure (e.g. by email, letter, official mention on the certificate or on the TIR Carnet etc).

Guidelines for borders management 

  • The European Commission has adopted a practical guidance (Communication (2020) 2010 final of 26 March) in order to maintain the free movement of goods and to harmonize the fight against the Covid-19 between Member States
  • The Commission stressed the importance of the following points:
    • Border controls must be limited;
    • No additional certification should be required on goods moving legally within the EU;
    • No restriction should be imposed on medical and foodstuff of first necessity, except in justified cases.

EU “green lanes”

  • The European Commission has adopted a practical guidance (Notice 2020/C 96 I/01 of 24 March 2020) to ensure continuous flow of goods across the EU:
    • Member States are requested to designate all the relevant internal border-crossing points on the trans-European transport network as ‘green lane' border crossings;
    • The green lane border crossings should be open to all freight vehicles, whatever goods they are carrying;
    • Crossing the border, including any checks and health screening, shall not take more than 15 minutes.


  • European Commission Guidance on Customs issues (revision 4, June 2020).
  • European Commission Decision of 23.7.2020 on relief from import duties and VAT exemption on importation granted for goods needed to combat the effects of the COVID-19 outbreak during 2020.

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