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Coronavirus: EU Commission proposes to provide €81.4 billion in financial support for 15 Member States under SURE

The European Commission has presented proposals to the Council for decisions to grant financial support of €81.4 billion to 15 Member States under the SURE instrument. SURE is a crucial element of the EU’s comprehensive strategy to protect citizens and mitigate the severely negative socio-economic consequences of the coronavirus pandemic. It is one of the three safety nets agreed by the European Council to shield workers, businesses and countries.
Once the Council approves these proposals, the financial support will be provided in the form of loans granted on favourable terms from the EU to Member States. These loans will assist Member States in addressing sudden increases in public expenditure to preserve employment. Specifically, they will help Member States to cover the costs directly related to the financing of national short-time work schemes, and other similar measures they have put in place as a response to the coronavirus pandemic, in particular for the self-employed.
Following consultations with the Member States that have requested support and after assessing their requests, the Commission proposes to the Council to approve the granting of financial support to:

Belgium
€7.8 billion

Bulgaria
€511 million

Czechia
€2 billion

Greece
€2.7 billion

Spain
€21.3 billion

Croatia
€1 billion

Italy
€27.4 billion

Cyprus
€479 million

Latvia
€192 million

Lithuania
€602 million

Malta
€244 million

Poland
€11.2 billion

Romania
€4 billion

Slovakia
€631 million

Slovenia
€1.1 billion

SURE can provide financial support of up to €100 billion in total to all Member States.  The proposals put forward by the Commission to the Council for decisions to grant financial support amount to €81.4 billion and cover 15 Member States. Portugal and Hungary have already submitted formal requests which are being assessed. The Commission expects to put forward a proposal to grant support to Portugal and Hungary shortly. Member States which have not yet made formal requests may still do so.
Loans provided to Member States under the SURE instrument will be underpinned by a system of voluntary guarantees from Member States. The Commission expects that the process of Member States finalising their guarantee agreements with the Commission will be completed very shortly.
Members of the College said:
President Ursula von der Leyen said: “We must do everything in our power to preserve jobs and livelihoods. Today marks an important step in this regard: just four months after I proposed its creation, the Commission is proposing to provide €81.4 billion under the SURE instrument to help protect jobs and workers affected by the coronavirus pandemic across the EU. SURE is a clear symbol of solidarity in the face of an unprecedented crisis. Europe is committed to protecting citizens.”
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “Workers are currently enduring enormous insecurity, and we need to support them to overcome this crisis and relaunch our economies. That is why the Commission proposed SURE, to help protect workers and facilitate the economic rebound. Today, we welcome Member States’ strong interest in accessing the cheap funding available under SURE to support short-time work schemes and similar measures, and we look forward to a fast decision process to start disbursing the loans.”
Nicolas Schmit, Commissioner for Jobs and Social Rights, said: “SURE was one of the first safety nets we decided to put in place to guarantee that workers have an income while their jobs have been suspended, and that their employment is preserved. SURE will therefore help a swifter recovery. All Member States will soon have provided a cumulative €25 billion in guarantees, and we propose that the 15 Member States who requested support receive a cumulated €81.4 billion in loans. This is a demonstration of European solidarity, of how together we are stronger for the benefit of all European citizens.”
Paolo Gentiloni, Commissioner for Economy, said: “Short-time work schemes have played a key role in cushioning the impact on jobs of the COVID-19 pandemic. SURE is the European Union’s contribution to these essential safety nets. It will help to protect workers against unemployment and preserve the jobs and skills that we will need as our economies recover. The high demand from our Member States confirms the vital importance of this scheme.”
Background
As part of its coronavirus response, the Commission proposed SURE on 2 April 2020. Member States in the Council adopted the regulation establishing SURE on 19 May 2020.
Each Member State’s contribution to the overall amount of the guarantee corresponds to its relative share in the total gross national income (GNI) of the European Union, based on the 2020 EU budget.
Compliments of the European Commission.
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The crisis and Europe’s responsibilities

Blog post by EU High Representative Josep Borrell |
Last Monday I opened the Summer University of the Universidad Internacional Menendez Palacio in Santander (Spain). We mostly discussed the consequences of the current crisis for Europe and the world. At this stage, the risk seems serious that it destabilises many developing countries and strengthens a trend towards authoritarian regimes. In this context, Europe has a key responsibility to defend effective multilateralism and help developing countries in need.
“The actual crisis risks destabilizing many developing countries and strengthening a trend towards authoritarian regime. Europe has a key responsibility to help countries in need, defend democratic values and advocate effective multilaterlism.”
This week I have been in Santander, north of Spain, where I have been directing a course on the future of Europe – Quo Vadis Europa ? – since 21 years now. The coronavirus shouldn’t stop this much celebrated academic event from continuing, so it was organised this year as a VTC. The main issue was unavoidably how the pandemics has been a game changer on the process of European integration and its role in the world. I gave the introductory remarks and today we have had the last lecture with professor Enrico Letta, former Italian prime minister. Thanks to all that participated and the thousands that followed the course.
Whilst following closely the international events, and in particular the Belarusian crisis, and participating by VTC at the European Council about it, I have had the opportunity to express during this course my fears about the global consequences of the pandemic and the key responsibilities Europe have in that context. This are some of the ideas exposed during my introductory remarks. Many others have arisen during the discussions: they could for sure feed further reflections on this blog.
Europa has been severely affected but reacted swiftly
This crisis, which is far from over, is the most important since the Second World War. It is also the most global crisis we have experienced so far. The European Union has been severely affected by the epidemic with several member states, Italy and Spain in particular, among the worst-hit in the world. After a slow start, Europe has successfully taken strong measures to regain control of the situation even if the threat of a resumption of the pandemic persists.
Europe benefits from its social model, the most developed in the world, which has made it possible to guarantee a high and widespread level of medical care, while maintaining people’s income. Nevertheless, the crisis has affected the Member States of the Union in very different ways, which risked deepening already existing differences and the functioning of the single market. This is why it was essential to provide special support to the countries hit hardest. This is the main purpose of the EU recovery plan, which was approved by the European Council last July, a major step to improve the European architecture.
“If Europe completes the process of strengthening its solidarity and internal cohesion, it could reinforce its position in the world.”
I am confident that Europeans will come out of this crisis convinced that more Europe is needed. If Europe completes the process of strengthening its solidarity and internal cohesion, it could reinforce its position in the world. This was not the case in either previous financial crises. Although these crises started in America, they ultimately had more serious and lasting consequences in Europe because we struggled to react quickly and strongly enough. It seems that the reverse may be true this time, giving Europe a major global responsibility.
The crisis has hit developing countries very hard
Away from Europe and the US, the crisis has indeed hit the developing countries very hard, whether in South Asia, Africa or Latin America, which is now the epicentre of the epidemic. This poses enormous risks for the future of the world in terms of inequality and social cohesion but also for peace and security.
“The crisis poses enormous risks for the future of the world in terms of inequality and social cohesion but also for peace and security.”
In many of these countries, the weakness of the health systems has combined with that of the social safety nets to make the fight against the epidemic extremely difficult. The importance of informal employment and the living conditions in slums have made it particularly hard to implement prolonged lockdown measures.
Developing countries have also been affected by the crisis through the fall in the price and volume of trade for raw materials linked to the slowdown in the world economy. Oil and gas producing developing and emerging countries in particular, like Iraq, Oman, Algeria or Nigeria, have seen their revenues plummet.
Remittances from migrants and tourism revenues are collapsing
Many developing countries rely also on remittances from migrants. According to the World Bank(link is external), it represented a flow of $ 554 billion in 2019 for low and middle income countries and represented more than 5 % of the GDP in 66 countries and even more than 10 % in 31 of them. This flow is expected to decline by at least 20%, or more than $100 billion, this year.
In addition to that, international tourism has also collapsed. According to the UN World Tourism Organisation(link is external), we have globally experienced a drop of 56% year-on-year in tourist arrivals between January and May. This translates into $ 320 billion lost in international tourism revenue, more than three times the loss during the 2009 economic crisis.
“It is important to keep in mind that a recession in a low income country – even a limited one – has more serious consequences than in high income countries.”
Last June, the International Monetary Fund(link is external) predicted that GDP growth in the most developed countries would fall this year by 9.7 on average compared to 2019. It is more than in the emerging – 6.7 – and low-income countries – 6.2. Geographically, the expected drops vary significantly: – 9,5 points for Latin America vs – 6,5 for Sub Saharian Africa, – 6,3 for Asia and – 5,7 for the Middle East. In all this it is important to keep in mind that a recession in a low income country – even a limited one – has more serious consequences than in high income countries in Europe or elsewhere.
These difficulties are reflected in particular in the area of external financing. The cases of Lebanon or Argentina are the most obvious, but there are many more : developing countries do not generally have the same capacity as the United States, China or Europe to resort to massive monetary creation and budget deficits to support their economies in crisis without experiencing negative consequences.
“The ability of the richest countries to help developing countries to cope with this crisis, despite having their own difficulties, will be decisive in the coming weeks and months.”
We will likely face strong social and political tensions in several regions of the world as we have already seen vividly in Lebanon, Belarus or Mali. The ability of the richest countries to help developing countries to cope with this crisis, despite having their own difficulties, will be decisive in the coming weeks and months. We can expect this to be one of the main issues at stake in the China-US rivalry but it is also a central issue for Europe, particularly in relation to our neighbourhood, in Africa and the Middle East.
The question of debt restructuring
Helping developing countries cope with the crisis is not only a question of solidarity, but also a matter of a well-understood interest: even if Europeans manage to cope with the crisis at home, if surrounding countries are destabilised, Europe will also be affected. In addition to outright financial support, the international debate on helping developing countries will also revolve around the process of restructuring and cancelling the debts of countries in difficulty. Those who will be the most proactive in this area during the next months, will have scored points for the post-crisis period.
“It is up to Europe to mobilise democracies to defend and promote fundamental human rights and democratic values in the international arena.”
At a time when the United States is tending to turn in on itself and authoritarian powers are gaining strength, it is also up to Europe to mobilise democracies to defend and promote fundamental human rights and democratic values in the international arena. Whether in Hong Kong, Sudan or Belarus, the events of the last few months have confirmed, if proof were needed, that the desire for political rights and freedoms remain universal. The peoples of all continents who are deprived of it continue to aspire to it as soon as they succeed in lifting the leaden cloak of repression.
The urgent need for a renewed multilateralism
This remobilization of democracies must serve to defend and promote a renewed multilateralism, adapted to the world of the 21st century and its challenges. The Covid-19 pandemic has shown how much we need multilateral cooperation: as long as we do not have a vaccine, we will only be able to control this disease if it is controlled everywhere.
This is true for the coronavirus pandemic but also for many other global challenges. Indeed the current health and economic crisis must not make us forget the seriousness of the threat posed by the ecological crisis. We can only hope to overcome this crisis through strong and closely coordinated global action, in particular to implement swiftly the Paris agreement and combate jointly biodiversity loss.
Compliments of the European Union External Action.
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Joint Statement of the United States and the European Union on a Tariff Agreement

21 August 2020| Brussels
United States Trade Representative Robert Lighthizer and European Union Trade Commissioner Phil Hogan today announced agreement on a package of tariff reductions that will increase market access for hundreds of millions of dollars in U.S. and EU exports. These tariff reductions are the first U.S.-EU negotiated reductions in duties in more than two decades.
Under the agreement, the EU will eliminate tariffs on imports of U.S. live and frozen lobster products. U.S. exports of these products to the EU were over $111 million in 2017. The EU will eliminate these tariffs on a Most Favored Nation (MFN) basis, retroactive to begin August 1, 2020. The EU tariffs will be eliminated for a period of five years and the European Commission will promptly initiate procedures aimed at making the tariff changes permanent. The United States will reduce by 50% its tariff rates on certain products exported by the EU worth an average annual trade value of $160 million, including certain prepared meals, certain crystal glassware, surface preparations, propellant powders, cigarette lighters and lighter parts. The U.S. tariff reductions will also be made on an MFN basis and retroactive to begin August 1, 2020.
“As part of improving EU-US relations, this mutually beneficial agreement will bring positive results to the economies of both the United States and the European Union.  We intend for this package of tariff reductions to mark just the beginning of a process that will lead to additional agreements that create more free, fair, and reciprocal transatlantic trade” said Ambassador Lighthizer and Commissioner Hogan.
 The post Joint Statement of the United States and the European Union on a Tariff Agreement first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

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Results of the June 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD)

Most widespread tightening of credit terms over three-month review period since SESFOD launched in 2013
Less-favourable price terms for non-financial corporations and less-favourable non-price terms for hedge funds
Liquidity and trading deteriorated materially for all types of OTC derivatives, while initial margin requirements increased for almost all types
Some insurance companies, hedge funds and investment funds faced strained liquidity situations linked to variation margins
Survey respondents reported the most widespread tightening of credit terms and conditions over a three-month review period since the SESFOD was launched in 2013. For the March 2020 to May 2020 review period, their respective institutions offered less-favourable price and non-price credit terms for all counterparty types. For price terms, non-financial corporations were the most affected counterparty type, while for non-price terms the tightening of conditions was most noticeable for hedge funds. Respondents mainly attributed the tightening to a deterioration in general liquidity and market functioning, but they also suggested that current or expected financial strength of counterparties was an additional motivation for offering less-favourable conditions to hedge funds and non-financial corporations in particular.
The maximum amount and maturity of funding offered against all types of non-government euro-denominated collateral continued to decline, but rose for funding against government bonds as collateral. Haircuts applied to euro-denominated collateral increased significantly and financing rates/spreads increased for funding secured by all types of collateral except domestic government bonds. The liquidity of collateral deteriorated for all collateral types, and collateral valuation disputes recorded the strongest increase on record.
Initial margin requirements increased for all OTC derivatives except commodity derivatives, with a significant share of respondents reporting increased initial margin requirements for OTC credit derivatives referencing sovereigns, corporates and structured credit products. Respondents also reported that the maximum amount of exposures had decreased for OTC commodity derivatives and total return swaps referencing non-securities such as bank loans. Liquidity and trading deteriorated materially for all types of derivatives, with the most pronounced deterioration in credit derivatives referencing corporates, structured credit products and sovereigns. The volume, duration and persistence of valuation disputes rose further across all types of derivatives.
The June 2020 survey included a number of special questions aimed at gauging the impact of credit terms and margin requirements on market and counterparty liquidity situations against the background of the evolving coronavirus (COVID-19) crisis. Within the limits of their risk management frameworks, responding institutions accounted, to some degree, for their counterparties’ liquidity or solvency situation when tightening credit terms during this period. Responding institutions were able to roll over money market transactions, albeit at less-favourable pricing conditions for many institutions. Survey respondents reported that their clients predominantly covered liquidity needs resulting from margin calls by tapping repo markets or credit lines. However, some insurance companies, hedge funds and investment funds faced strained liquidity situations linked to the posting of variation margins.
The SESFOD is conducted four times a year and covers changes in credit terms and conditions over three-month reference periods ending in February, May, August and November. The June 2020 survey collected qualitative information on changes between March 2020 and May 2020. The results are based on responses from a panel of 28 large banks, comprising 14 euro area banks and 14 banks with head offices outside the euro area.
CONTACT:
For media queries, please contact William Lelieveldt at william.lelieveldt[at]ecb.europa.eu or tel.: +49 69 1344 7316.
Compliments of the European Central Bank.The post Results of the June 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD) first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

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ECB | Reduction in frequency of 7-day US dollar liquidity-providing operations as of 1 September 2020

ECB and other major central banks to reduce frequency of 7-day US dollar operations from three times per week to once per week, while 84-day operations continue to be offered weekly
New frequency effective as of 1 September 2020, to remain in place for as long as appropriate to support smooth functioning of US dollar funding markets
ECB and other major central banks standing ready to re-adjust provision of US dollar liquidity as warranted by market conditions
In view of continuing improvements in US dollar funding conditions and the low demand at recent 7-day maturity US dollar liquidity-providing operations, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, in consultation with the Federal Reserve, have jointly decided to further reduce the frequency of their 7-day operations from three times per week to once per week. This operational change will be effective as of 1 September 2020. At the same time, these central banks will continue to hold weekly operations with an 84-day maturity.
These central banks stand ready to re-adjust the provision of US dollar liquidity as warranted by market conditions. The swap lines among these central banks are available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad.
CONTACT:
For media queries, please contact Eva Taylor, at eva.taylor[at]ecb.europa.eu or tel.: +49 69 1344 7162.
Compliments of the European Central Bank.The post ECB | Reduction in frequency of 7-day US dollar liquidity-providing operations as of 1 September 2020 first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

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European Citizens’ Initiative: Commission decides to register ‘Right to Cure’ initiative

Today, the European Commission decided to register a European Citizens’ Initiative (ECI) entitled ‘Right to Cure’. The organisers of the ECI call on the Union ‘to put public health before private profit [and] make anti-pandemic vaccines and treatments a global public good, freely accessible to everyone’.
The ECI lists the following objectives:
Ensure that intellectual property rights, including patents, do not hamper the accessibility or availability of any future COVID-19 vaccine or treatment;
Ensure that EU legislation on data and market exclusivity does not limit the immediate effectiveness of compulsory licenses issued by Member States;
Introduce legal obligations for beneficiaries from EU funds to share COVID-19 health technology related knowledge, intellectual property and/or data in a technology or patent pool;
Introduce legal obligations for beneficiaries from EU funds regarding transparency on public contributions, production costs, as well as accessibility and affordability clauses combined with non-exclusive licenses.
The Commission considers that the ECI is legally admissible, as it meets the necessary conditions, and therefore decided to register it. The Commission has not analysed the substance of the ECI at this stage.
Next steps
Following today’s registration of the ECI, the organisers can start, within the next 6 months, a 1-year process of collection of signatures of support. Should the ECI receive 1 million statements of support within 1 year from at least 7 different Member States, the Commission will have to react within 6 months. The Commission could decide either to follow the request, or not, and in both instances would be required to explain its reasoning.
Background
The European Citizens’ Initiative was introduced with the Lisbon Treaty as an agenda-setting tool in the hands of citizens. It was officially launched in April 2012.
Once formally registered, a European Citizens’ Initiative allows for 1 million citizens from at least one quarter of EU Member States to invite the European Commission to propose a legal act in areas where the Commission has the power to act.
The conditions for admissibility are: (1) the proposed action does not manifestly fall outside the framework of the Commission’s powers to submit a proposal for a legal act, (2) it is not manifestly abusive, frivolous or vexatious and (3) it is not manifestly contrary to the values of the Union.
Since the beginning of the ECI, the Commission has registered in total 75 Citizens’ Initiatives and refused 26.
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Coronavirus: EU Commission continues expanding future vaccines portfolio with new talks

The European Commission has today concluded exploratory talks with CureVac to purchase a potential vaccine against COVID-19. This is following the positive steps with Sanofi-GSK on 31 July and Johnson & Johnson on 13 August and the signature of an Advance Purchase Agreement with AstraZeneca on 14 August.
The envisaged contract with CureVac would provide for the possibility for all EU Member States to purchase the vaccine, as well as to donate to lower and middle income countries or re-direct to European countries. It is anticipated that the Commission will have a contractual framework in place for the initial purchase of 225 million doses on behalf of all EU Member States, to be supplied once a vaccine has proven to be safe and effective against COVID-19. The Commission pursues intensive discussions with other vaccine manufacturers.
Ursula von der Leyen, President of the European Commission, said: “The European Commission delivers on its promise to secure rapid access for Europeans and the world to a safe vaccine that protects us against the coronavirus. Each round of talks that we conclude with the pharmaceutical industry brings us closer to beating this virus. We will soon have an agreement with CureVac, the innovative European firm that received earlier EU funding to produce a vaccine in Europe. And our negotiations continue with other companies to find the technology that would protect us all“.
Stella Kyriakides, Commissioner for Health and Food Safety, said: “Today we concluded talks with the European company CureVac to increase the chances of finding an effective coronavirus vaccine. We continue to work shoulder to shoulder with Member States and with vaccine developers to fulfil the aims of our European Vaccines Strategy – a vaccine for all.”
CureVac is a European company pioneering the development of a completely new class of vaccines based on messenger RNA (mRNA), transported into cells by lipid nanoparticles. The vaccine platform has been developed over the last decade. The basic principle is the use of this molecule as a data carrier for information, with the help of which the body itself can produce its own active substances to combat various diseases.
The exploratory talks concluded today are intended to result in an Advance Purchase Agreement to be financed with the Emergency Support Instrument, which has funds dedicated to the creation of a portfolio of potential vaccines with different profiles and produced by different companies.
Background
On 6 July, the European Investment Bank and CureVac signed a €75 million loan agreement for the development and large-scale production of vaccines, including CureVac’s vaccine candidate against COVID-19.
Today’s conclusion of the exploratory talks with CureVac is an important step towards the conclusion of an Advance Purchase Agreement, and therefore towards the implementation of the European Vaccines Strategy, adopted by the Commission on 17 June 2020. This Strategy aims to secure high-quality, safe, effective and affordable vaccines for all European citizens within 12 to 18 months. To do so, and together with the Member States, the Commission is agreeing Advance Purchase Agreements with vaccine producers reserving or giving the Member States the right to buy a given number of vaccine doses for a certain price, as and when a vaccine becomes available.
The European Commission is also committed to ensuring that everyone who needs a vaccine gets it, anywhere in the world and not only at home. No one will be safe until everyone is safe.
This is why it has raised almost €16 billion since 4 May 2020 under the Coronavirus Global Response, the global action for universal access to tests, treatments and vaccines against coronavirus and for the global recovery.
Compliments of the European Commission.The post Coronavirus: EU Commission continues expanding future vaccines portfolio with new talks first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

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EACCNY Labor Post-Pandemic Series Presents | Returning to Work During Covid-19: Managing Vulnerable Workers from a US and UK Perspective

With the help of our members, we are creating a Thought-Leadership series on the impact of COVID-19 on Labor & Employment from the perspective of both sides of the Atlantic. Today, we present Jill Kahn Marshall, Partner at Reavis Page Jump LLP in New York, and Matthew Kyle, Associate Director at Osborne Clarke in the UK, who will address “Returning to Work During Covid-19: Managing Vulnerable Workers from a US and UK Perspective.”  |
As offices reopen throughout the United States and Europe amidst an ongoing pandemic, employers must determine how to handle employee requests for health-related accommodations and how best to keep their workforce safe.  The United States, the United Kingdom and the European Union already have frameworks in place to protect vulnerable workers, and now employers must determine how these apply in light of the Covid-19 pandemic.
The United States and the Americans with Disabilities Act (ADA)
In the United States, the Americans with Disabilities Act (ADA)  requires covered employers to engage in an interactive process to provide reasonable accommodations for disabled employees, absent undue hardship to the employer.  In the midst of the Covid-19 pandemic, employers are receiving such requests from employees with underlying medical conditions which put them at higher risk from contracting Covid-19.  Due to the contagious nature of the virus, employees are also requesting accommodations where it is not they, but a family member with whom they reside, who is in a high risk category.
In response to these trends, the United States Equal Employment Opportunity Commission (EEOC), the federal government agency tasked with enforcing the ADA, has issued guidance to help employers handle these novel requests.  The EEOC guidance confirms that having an underlying medical condition which puts the employee at higher risk from Covid-19 does qualify as a disability for which the employer must consider reasonable accommodations, such as changes to the workspace or remote work to limit the employee’s exposure to others.  Although the Centers for Disease Control and Prevention (CDC) has stated individuals 65 and older are at greater risk of harm from the virus, falling within this age range alone does not trigger protections of the ADA.  The EEOC also clarifies that the ADA does not require accommodations for workers based on the underlying medical conditions of a relative.  Although the ADA prohibits discrimination based on association with an individual with a disability, that protection is limited to disparate treatment or harassment.
Accommodating Workers with Mental Illness
In addition to creating risks for people with underlying physical conditions, the pandemic has also exacerbated the conditions of workers who grapple with mental illness.  While feeling stress related to the pandemic alone would not necessarily qualify as a disability under the ADA, a preexisting anxiety disorder triggered by the pandemic would.  Employers must work with employees to see whether together, they can find an accommodation that works for both parties.
The Undue Hardship Defense
During the pandemic, employers may still utilize the ADA’s “undue hardship” defense, in that they are not required to provide an accommodation if it would impose a “significant difficulty or expense” on the employer.  In recognition that many employers are facing economic hardship as a result of the pandemic, the EEOC has expanded the definition of “significant expense.”  The employer’s sudden loss of income due to the pandemic is now relevant, as is the discretionary funds available to the employer during this difficult period.  This change does not allow employers to reject any accommodation that costs additional money during the pandemic, but rather, employers must weigh the cost of accommodations against their budget, accounting for constraints caused by the pandemic.
Protecting the Workforce
U.S. employers must also consider the ADA when making decisions about employees who may have contracted Covid-19 or are at a higher risk from doing so.  The EEOC advises that in order to protect the workforce from Covid-19, employers may require employees returning to work submit health questionnaires, undergo temperature checks, or take Covid-19 viral tests as a condition for returning to the workplace.  (Employers’ legal obligations surrounding the use and dissemination of the medical information obtained raises a host of privacy issues of which employers must be mindful of as well.)   Employers are not, however, permitted to require antibody tests, as the CDC has stated not enough is known about the immunity conferred by the presence of antibodies to make decisions about who can return to work based on these test results.
Policies for Older Workers and Pregnant Workers
While employers can take precautions to prevent those potentially infected with Covid-19 from entering the workplace, they cannot institute blanket policies related to higher risk individuals, even if the goal is to protect those workers or the general workforce.  For example, employers cannot mandate that workers 65 years or older, or pregnant workers, each of whom have been identified as being at greater risk from the virus, work from home, while allowing workers in other categories to choose whether to come into the office.  Employers can, however give these high risk employees the choice of whether to come into the office, as long as it is ultimately the employee’s decision.
Vulnerable Employees in the United Kingdom and European Union
As employees return to work there will be a renewed focus on the differing requirements of individuals and what employers should be doing to ensure that their health is protected.  In this section we briefly consider the issues arising out of health and safety and employment legislation in the UK.  However, the same themes and broad duties will also be applicable across the European Union as they reflect the same statutory framework.
The UK government recognises two groups of vulnerable people – those who are clinically extremely vulnerable (such as those diagnosed with cancer or who have had organ transplants) and those who are clinically vulnerable (over 70, pregnant or with some underlying health condition).
At present the government guidance for both categories is the same, although this could change if transmission increases, the most likely change being the requirement for extremely clinically vulnerable to return to self-shielding.  Therefore both extremely vulnerable and clinically vulnerable persons can go to work as long as the workplace is Covid-secure, but should carry on working from home wherever possible.  Covid-secure is a catch all term to indicate that those in control of the workplace environment have taken reasonable steps to mitigate the risk of transmission.  However, as a community virus and with people travelling to work often on public transport, for vulnerable individuals concerned it may not provide sufficient reassurance.
Employers have a legal duty under the Health and Safety at Work Etc. Act 1974, to control risks to the health and safety of employees and others affected by its business as far as is reasonably practicable. The starting point is to consider the risk to those who are particularly vulnerable to Covid-19 and put reasonable controls in place to reduce that risk.  Like other material risks to health and safety, the risk of Covid-19 should be assessed in terms of the operation of your business, including issues such as interaction with other parties and the shared use of facilities and equipment.  It is likely that the control measures that this assessment produces such as social distancing, good hygiene, cleaning, ventilation and supervision, will be those also used to protect vulnerable employees.  Whilst there may be no expectation of additional controls for vulnerable persons it is even more critical that those existing controls are stringently applied.  Therefore thinking not just about the initial implementation of procedures, but how compliance will be monitored is essential.
Ensuring that vulnerable workers are protected requires the employer to fully understand their needs, and this can only be achieved through clear and regular communication.  Consideration should extend to those employees living with someone who is clinically extremely vulnerable, something which will not be apparent unless the right questions have been asked and with the appropriate sensitivity.
It is important to explain what will be done to make the workplace safe. By consulting and involving vulnerable people in the steps employers are taking to manage Covid-19 risks they can hear their ideas and make sure changes will work.
Working from home or taking unpaid leave is currently a better approach for vulnerable employees if they are unhappy about returning to work. Many vulnerable employees will also qualify as disabled for the purposes of the Equality Act 2010. This means they have the right to reasonable adjustments, which could potentially include staying at home (if they are still able to perform their role).
It is also unlawful to operate provisions, criteria or practices which would put disabled employees at a disadvantage compared with non-disabled employees, unless this is justified. A policy of requiring vulnerable people to return to work could potentially be indirectly discriminatory and require justification. It may be hard to justify requiring an unwilling vulnerable employee to come back to work if, for example, other employees could cover their role or the employer could recruit temporary cover.
Pregnant employees
Employers must assess and control the specific risks to pregnant employees. It may be possible to do this by taking extra precautions to enforce safe distancing in the workplace. The current guidance does not say that vulnerable employees can never be asked to work, and this includes pregnant employees. It is a matter for employers’ own risk assessment and whether they are confident that they can provide a safe workplace.
If employers cannot ensure safe working conditions, they may need to temporarily alter the pregnant employees’ working conditions or hours, provide suitable alternative work on the same terms and conditions or (as a last resort) suspend the employee on full pay. This right to be suspended on full pay does not apply to other vulnerable employees, and in practice means that pregnant employees are treated differently than other vulnerable people.
What if the employee has anxiety which impacts on their ability to return to work?
If employers require their return, they may not be fit and able to work and may be signed off sick as a result, which would entitle them to sick pay. Even if they are not signed off sick, employees with some long-term mental health conditions may be disabled for the purposes of the Equality Act and it may be a reasonable adjustment to allow them to stay at home. They will not, however, be entitled to pay unless they are on sick leave or working from home.
Whether in the United States, United Kingdom, or the rest of Europe, good communication and an inclusive mindset is key to a successful return to work plan during Covid-19.  Employers need to take individual circumstances into account and act reasonably in considering any requests to stay at home; applying a blanket rule requiring all employees to return will not only raise the risk of a discriminatory impact, but could also damage the relationship of trust and confidence between the employer and its employees.  These are unprecedented circumstances for all parties involved, and employers must remain vigilant as the interpretation of the relevant laws continue to evolve during this pandemic.
AUTHORS:
Jill Kahn Marshall, Partner at Reavis Page Jump LLP, New York 
jmarshall@rpjlaw.com | +1 212 763 4145
Matthew Kyle, Associate Director at Osborne Clarke, UK 
Matt.kyle@osborneclarke.com | +44 781 126 9090
Stay tuned for more on this series! We hope you enjoy these Thought-Leadership pieces written by our members.

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EACC

IMF | Aging Economies May Benefit Less from Fiscal Stimulus

In the midst of the current COVID-19 pandemic, policymakers around the world are undertaking fiscal stimulus—a combination of spending increases and tax reductions—to support their economies. Even before the present crisis, the importance of fiscal policy has been increasing, with monetary policy constrained by near-zero interest rates. Our new staff research finds that age also matters when considering fiscal stimulus. Specifically, we find that fiscal policy isn’t as effective in boosting growth in economies with older populations, compared to economies with younger populations.
As our chart shows, fiscal stimulus in economies with a younger population has a significantly positive effect on growth, but the effect is much weaker in aging economies. We looked at 17 Organization for Economic Cooperation and Development countries from 1985 to 2017, and split the sample into two groups by looking at the ratio of old people among population. In the aging economies, the average old-age dependency ratio (defined as the ratio of people 65 and older to those between 15 and 64 years old) is 26.5 percent whereas in non-aging economies it is 18.9 percent.
Image courtesy of the IMF.
On a more granular level, an aging economy behaves this way because its labor force isn’t growing, while its public debt tends to be high, and, therefore, fiscal stimulus has weaker effects on private consumption and investment. This is because the working age population is more likely than retirees to benefit from fiscal stimulus through effects such as increased corporate hiring. Furthermore, many pensioners are on fixed incomes whose consumption remains steady or even declines over time. In addition, population aging could reduce potential growth (by lowering labor input and productivity), with which fiscal stimulus may induce less private investment. The “older” the economy and the higher its debt, the less impact fiscal stimulus has on growth.
These findings complement existing observations that countries with aging populations have relatively low growth and higher public debt. Yet our findings are especially important because old-age dependency ratios have been rising for several decades and are projected to increase further. Within the next 30 years, more than 20 countries across the world would exceed the old-age dependency ratio of 50 percent—an unprecedented level in global history—with some even reaching 70 percent.
In other words, population aging is posing significant challenges to policymakers. How can we support aggregate demand with the weaker growth impact of fiscal stimulus in aging economies? The paper draws the following implications for policymakers to consider:
A larger fiscal stimulus may be required to support aggregate demand during recessions.
Given the lower output effects of fiscal stimulus, other economic policies (including structural reforms) would need to play a more important role in supporting domestic demand. Policy measures to enhance labor supply (for example, through stronger female labor force participation or labor market needs-based immigration) would help increase the output effects in aging societies.
Secure sufficiently large fiscal space (room to raise spending or lower taxes more than previously planned, without endangering debt sustainability or access to capital markets) during booms, in order to prepare for a larger fiscal stimulus during recessions, without creating concerns for fiscal sustainability.
AUTHORS:
Jiro Honda, Deputy Division Chief in the IMF’s Fiscal Affairs Department
Hiroaki Miyamoto, Professor of Economics and Business Administration at Tokyo Metropolitan University
Compliments of the IMF.

EACC

FSB Continuity of Access to FMIs for firms in resolution: streamlined information collection to support resolution planning

This questionnaire provides common template for gathering information about continuity of access to financial market infrastructures (FMIs) for firms in resolution. The template takes the form of a questionnaire that all FMIs are encouraged to complete. The responses to the questionnaire should be published or made available in other ways to firms that use the FMI services and their resolution authorities to inform their resolution planning. The use of a common questionnaire should reduce the “many to one” nature of inquiries from FMI participants and authorities to FMIs for resolution planning and streamline the provision of this information from FMIs to firms and authorities.
The questionnaire follows from a workshop held in May 2019 with stakeholders about the implementation of the FSB’s Guidance on Continuity of Access to Financial Market Infrastructures (FMIs) for a Firm in Resolution. The Guidance sets out arrangements and safeguards to facilitate continued access to critical clearing, payment, settlement, custody and other services provided by FMIs in cases where firms need to be resolved.
The FSB developed the questionnaire in consultation with FMIs, FMI participants, FMI oversight authorities and with the assistance of the Secretariats of the International Organization of Securities Commissions and of the Committee on Markets and Payments Infrastructures. It covers general information on the FMI and its legal structure; (the rulebook/contractual provisions regarding termination; and arrangements and operational processes to facilitate continued access in resolution. The experience with the use of the questionnaire will be reviewed after one year in consultation with FMIs and FMI participants.
The FSB will hold a webinar for stakeholders in September to explain the questionnaire and answer questions. Representatives of FMIs, FMI participants and authorities who would like to attend should contact fsb@fsb.org for more details.
Compliments of the Financial Stability Board.