As part of the EU’s response to the Covid-19 pandemic, the Council today adopted a set of conclusions aimed at restoring passengers’ and workers’ confidence by minimising the risk of infection in cross-border collective passenger transport systems.
In the conclusions, the Council promotes a number of basic hygiene and infection control measures, which should apply to all cross-border collective passenger transport services. Such recommended measures consist of among others :
physical distancing or, where this is not feasible, use of masks,
greater use of digital ticketing and digital ticket inspections,
observing high standards of fresh air circulation and cleanliness of means of transport.
The Council also invites the Commission and member states to continue coordinating on the application of the transport guidelines and recommendations on Covid-19 adopted at national and EU level.
Council conclusions aimed at restoring passengers’ and workers’ confidence by minimising the risk of infection in cross-border collective passenger transport systems, 24 July 2020
Compliments of the European Council, Council of the European Union

Yesterday, the European Commission has signed a contract with the pharmaceutical company Gilead to secure treatment doses of Veklury, the brand name for Remdesivir. Veklury was the first medicine authorised at EU level for treatment of COVID-19. As from early August onwards, and in order to meet immediate needs, batches of Veklury will be made available to Member States and the UK, with the coordination and support of the Commission.
Stella Kyriakides, Commissioner for Health and Food Safety, said: “In recent weeks, the Commission has been working tirelessly with Gilead to reach an agreement to ensure that stocks of the first treatment authorised against COVID-19 are delivered to the EU. A contract has been signed yesterday, less than a month after the authorisation of Remdesivir, which will allow the delivery of treatments from early August for thousands of patients. The Commission is leaving no stone unturned in its efforts to secure access to safe and efficient treatments, and is supporting the development of vaccines against coronavirus. Yesterday’s agreement is another important step forward in our fight to overcome this disease”.
The Commission’s Emergency Support Instrument will finance the contract, worth a total of €63 million. This will ensure the treatment of approximately 30,000 patients presenting severe COVID-19 symptoms. This will help to cover the current needs over the next few months, while ensuring a fair distribution at EU level, based on an allocation key, taking into account the advice from the European Centre for Disease Prevention and Control.
The Commission is now also preparing a joint procurement for further supplies of the medicine, expected to cover additional needs and supplies as from October onwards.
Background
On 3 July, Remdesivir became the first treatment to be authorised for a conditional marketing authorisation. This authorisation facilitates early access to medicines in public health emergency situations, such as the current pandemic.
Remdesivir is a treatment against COVID-19 for adults and adolescents as from age 12 with pneumonia who require supplemental oxygen. The application for the marketing authorisation was submitted to the European Medicines Agency (EMA) on 8 June. EMA’s recommendation was endorsed by the Member States through the Standing Committee on Medicinal Products for Human Use.
While authorised in the EU, the medicine continues to be monitored to ensure safety. Gilead has also been requested to submit the final reports of the Remdesivir studies to the EMA by December 2020 as part of the conditions to be fulfilled to move from a conditional marketing authorisation to a full marketing authorisation. Further data on the effectiveness and safety of the medicine is expected to be submitted by August 2020 in order to finalise this process.
Compliments of the European Commission.

Corruption, the abuse of public office for private gain, is about more than wasted money: it erodes the social contract and corrodes the government’s ability to help grow the economy in a way that benefits all citizens. Corruption was a problem before the crisis, but the COVID-19 pandemic has heightened the importance of stronger governance for three reasons.
First, governments around the world are playing a bigger role in the economy to combat the pandemic and provide economic lifelines to people and firms. This expanded role is crucial but it also increases opportunities for corruption. To help ensure the money and measures are helping the people who need it most, governments need timely and transparent reporting, ex-post audits and accountability procedures, and close cooperation with civil society and the private sector.

Governments are playing a bigger role in the economy and this increases opportunities for corruption.

Second, as public finances worsen, countries need to prevent tax evasion and the waste and loss of funds caused by corruption in public spending.
Third, crises test people’s trust in government and institutions, and ethical behavior becomes more salient when medical services are in such high demand. Evidence of corruption could undermine a country’s ability to respond effectively to the crisis, deepening the economic impact, and threatening a loss of political and social cohesion.
During this crisis the IMF hasn’t taken its eye off the ball of our governance and anti-corruption work. Our message to all governments has been clear: spend whatever you need but keep the receipts, because we don’t want accountability to be lost in the process.
In our lending work, we have provided quick disbursements to meet urgent needs. At the same time, enhanced governance measures to track COVID-19 related spending have been part of the emergency financing for countries to fight the pandemic.
Borrowing countries have committed to (i) undertake and publish independent ex-post audits of crisis-related spending and (ii) publish crisis-related procurement contracts on the government’s website, including identifying the companies awarded the contract and their beneficial owners. The IMF also ensured that emergency resources are subject to the IMF’s Safeguards Assessment policy.
Long-term reform beyond the crisis
Governance safeguards for emergency assistance related to COVID-19 are part of a more comprehensive effort by the IMF to improve its member countries good governance and efforts to tackle corruption.
The IMF has significantly increased its focus on governance and corruption over the last few years. We adopted in 2018 an enhanced framework designed to make our work with countries more candid, evenhanded, and effective. This laid the foundation for our COVID-19 policy and lending response, where stronger governance matters even more.
We recently assessed our progress in recent years and published the findings in a staff analysis. Here are the key highlights:
We speak more candidly and in-depth about governance issues with countries. Text mining analysis shows that we increased coverage of governance and corruption issues in our annual assessments of countries’ economic health and in our lending programs. Governance-related references more than doubled in staff reports in the 18 months after the IMF approved the framework, compared with 2017. In 2019, the IMF discussed governance with countries four times more than the average over the prior ten years. Just recently—for instance—our surveillance work has focused on central bank governance and operations in Liberia, financial sector oversight in Moldova, and the anti-corruption framework in Mexico. Fund staff are proposing more concrete governance and anti-corruption recommendations.
IMF-supported lending programs include specific conditionality related to governance and anti-corruption reforms, with governance improvements now being a core objective of many programs.
We have stepped up technical assistance and training to help countries strengthen governance and anti-corruption efforts. We aim to help countries improve governance in areas such as tax administration, expenditure oversight, fiscal transparency, financial sector oversight, anti-corruption institutions, and asset declarations for senior officials. This includes governance diagnostic missions to a dozen countries, comprising detailed analysis of governance weaknesses based on legal frameworks and proposing prioritized solutions.
Moreover, so far, ten advanced economies—Austria, Canada, the Czech Republic, France, Germany, Italy, Japan, Switzerland, the United Kingdom, and the United States—have participated in the voluntary assessment of their national frameworks to limit opportunities for transnational corruption. The purpose of the assessments, conducted by the IMF, is to determine the degree to which a country does two things: (1) criminalizes and prosecutes bribery of foreign public officials and (2) prevents foreign officials from concealing corrupt proceeds in its own financial system or domestic economy. The IMF strongly encourages member countries to volunteer for such coverage in its annual economic health checks.
Curbing corruption requires government ownership of reforms, international cooperation, and a joint effort with civil society and the private sector. It also involves political will and the assiduous implementation of reforms over months and years.
This crisis will sharpen our focus on governance in the years ahead because of the pandemic’s devastating effects and costs for people and economies. Countries can’t afford to lose precious resources at the best of times, and even less so during and after the pandemic. If ever there was a time for anti-corruption reforms, it is now.
AUTHORS:
Vitor Gaspar, Martin Mühleisen, and Rhoda Weeks-Brown
Compliments of the IMF.

The Federal Reserve Board on Tuesday announced an extension through December 31 of its lending facilities that were scheduled to expire on or around September 30. The three-month extension will facilitate planning by potential facility participants and provide certainty that the facilities will continue to be available to help the economy recover from the COVID-19 pandemic.
The Board’s lending facilities have provided a critical backstop, stabilizing and substantially improving market functioning and enhancing the flow of credit to households, businesses, and state and local governments. Each facility was created under section 13(3) of the Federal Reserve Act with the approval of the Treasury Secretary.
The extensions apply to the Primary Dealer Credit Facility, the Money Market Mutual Fund Liquidity Facility, the Primary Market Corporate Credit Facility, the Secondary Market Corporate Credit Facility, the Term Asset-Backed Securities Loan Facility, the Paycheck Protection Program Liquidity Facility, and the Main Street Lending Program. The Municipal Liquidity Facility is already set to expire on December 31, with the Commercial Paper Funding Facility set to expire on March 17, 2021. Further details on each can be found here.
For media inquiries, call 202-452-2955
Compliments of the U.S. Federal Reserve Board. 

Main results
EU leaders agreed a recovery package and the 2021-2027 budget that will help the EU to rebuild after the pandemic and will support investment in the green and digital transitions.

We have reached a deal on the recovery package and the European budget. These were, of course, difficult negotiations in very difficult times for all Europeans. A marathon which ended in success for all 27 member states, but especially for the people. This is a good deal. This is a strong deal. And most importantly, this is the right deal for Europe, right now.President Michel at the press conference of the European Council

The socio-economic fallout from the COVID-19 crisis requires a joint and innovative effort at EU level in order to support the recovery and resilience of the member states’ economies.
To achieve the desired result and be sustainable, the recovery effort should be linked to the traditional MFF, which has shaped EU budgetary policies since 1988 and offers a long-term perspective.
EU leaders have agreed to a comprehensive package of €1 824.3 billion which combines the multiannual financial framework (MFF) and an extraordinary recovery effort under the Next Generation EU (NGEU) instrument.
Long-term EU budget
The new Multiannual Financial Framework (MFF) will cover seven years between 2021 and 2027. The MFF, reinforced by Next Generation EU, will also be the main instrument for implementing the recovery package to tackle the socio-economic consequences of the COVID-19 pandemic.
The size of the MFF – €1 074.3 billion – will allow the EU to fulfill its long-term objectives and preserve the full capacity of the recovery plan. This proposal is largely based on the proposal made by President Michel in February, which reflected two years of discussions between member states.
The MFF will cover the following spending areas:
single market, innovation and digital
cohesion, resilience and values
natural resources and the environment
migration and border management
security and defence
neighbourhood and the world
European public administration
Long-term EU budget 2021-2027 (background information)
Recovery fund
Next Generation EU will provide the Union with the necessary means to address the challenges posed by the COVID-19 pandemic. Under the agreement the Commission will be able to borrow up to €750 billion on the markets. These funds may be used for back-to-back loans and for expenditure channelled through the MFF programmes. Capital raised on the financial markets will be repaid by 2058.
The amounts available under NGEU will be allocated to seven individual programmes:
Recovery and Resilience Facility: €672.5 billion (loans: €360 billion, grants: €312.5 billion)
ReactEU: €47.5 billion
Horizon Europe: € 5 billion
InvestEU: €5.6 billion
Rural Development: €7.5 billion
Just Transition Fund (JTF): €10 billion
RescEU: €1.9 billion
A recovery plan for Europe (background information and timeline)
Allocation from the Recovery and Resilience Facility (RRF)
The plan ensures the money goes to the countries and sectors most affected by the crisis: 70% under the grants of the Recovery and Resilience Facility will be committed in 2021 and 2022 and 30% will be committed in 2023.
Allocations from the RRF in 2021-2022 will be established according to the Commission’s allocation criteria taking into account  member states’ respective living standards, size and unemployment levels.
Flexibility
EU leaders agreed on a Single Margin Instrument (SMI) to allow the financing of specific unforeseen expenditure in commitments and corresponding payments that could not be financed otherwise. The SMI annual ceiling will be set at EUR 772 million (2018 prices).
They 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 (€5 billion)
European Globalisation Adjustment Fund to support workers who lose their jobs in restructuring events linked to globalisation (€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 (€1.2 billion)
Governance and conditionality
In line with the principles of good governance, member states will prepare national recovery and resilience plans for 2021-2023. These will need to be consistent with the country-specific recommendations and contribute to green and digital transitions. More specifically, the plans are required to boost growth and jobs and reinforce the “economic and social resilience” of EU countries. The plans will be reviewed in 2022. The assessment of these plans will be approved by the Council by a qualified majority vote on a proposal by the Commission.
The disbursement of grants will take place only if the agreed milestones and targets set out in the recovery and resilience plans are fulfilled.
If, exceptionally, one or more member states consider that there are serious deviations from the satisfactory fulfillment of the relevant milestones and targets, they may request that the President of the European Council refer the matter to the next European Council.
Climate action
30% of the total expenditure from the MFF and Next Generation EU will target climate-related projects. Expenses under the MFF and Next Generation EU will comply with the EU’s objective of climate neutrality by 2050, the EU’s 2030 climate targets and the Paris Agreement.
Rule of law
The Union’s financial interests will be protected in accordance with the general principles embedded in the Union Treaties, in particular the values referred to in Article 2 TEU. The European Council also underlines the importance of the respect of the rule of law. Based on this background, a regime of conditionality to protect the budget and Next Generation EU will be introduced.
The European Commission will propose measures in case of breaches for adoption by the Council by qualified majority.
The European Council will quickly revert to the matter.
EU revenue: own resources
EU leaders agreed to provide the EU with new resources to pay back funds raised under Next Generation EU. They agreed on a new plastic levy that will be introduced in 2021. In the same year the Commission is expected to put forward a proposal for a carbon adjustment measure and a digital levy, both of which would be introduced at the latest by 1 January 2023.
The Commission would then come back with a revised proposal on the EU emissions trading scheme (ETS), possibly extending it to the aviation and maritime sectors. There may also be other new resources, such as a financial transaction tax. The proceeds of the new own resources introduced after 2021 will be used for early repayment of NGEU borrowing.
The new sources of finance come on top of existing own resources:
traditional own resources: mainly customs duties and sugar levies (member states will retain, by way of collection costs, 25% of the amounts collected, compared to 20% for 2014-2020)
VAT-based own resource: a uniform rate of 0.3% is applied to the value added tax base of each member state, with the taxable VAT base being capped at 50% of GNI for each country (methodology will be simplified)
GNI-based own resource: resulting from a uniform rate applied to the gross national income of member states, this rate is adjusted every year in order to balance revenue and expenditure (unchanged)
Under the MFF, the ceiling allocated to the EU to cover annual appropriations is fixed at:
for payments: 1.40% of the GNI of all member states
for commitments: 1.46% of the GNI of all member states
Rebates
Lump sum rebates on the annual gross national income-based contribution will be maintained for Denmark, Germany, the Netherlands, Austria and Sweden.
Background
On 10 July, European Council President Charles Michel presented his proposal for the MFF and the recovery package.
President Charles Michel presents his proposal for the MFF and the recovery package (Press release, 10 July 2020)
“The goals of our recovery can be summarised in three words: first convergence, second resilience and third transformation. Concretely, this means: repairing the damage caused by COVID-19, reforming our economies and remodelling our societies,” he said.
Following bilateral discussions with EU leaders, President Michel identified six ‘building blocks’ for a possible agreement.
On 19 June, EU leaders exchanged views, via video conference, on the proposal for a new recovery plan and for the multiannual financial framework (MFF) for 2021-2027, presented by the European Commission on 27 May 2020.
Following the meeting, Charles Michel, President of the European Council, started political negotiations with EU leaders.
Video conference of the members of the European Council, 19/06/2020
On 23 April 2020, the European Council decided to work towards establishing a recovery fund to respond to the COVID-19 crisis. Leaders tasked the European Commission with putting forward a proposal urgently, and also clarifying the link between the recovery fund and the EU’s long term budget.
Video conference of the members of the European Council, 23 April 2020
A recovery plan for Europe (background information and timeline)
Long-term EU budget 2021-2027 (background information)
Compliments of the European Council, Council of the European Union.

Press release by the European Commission and the German Presidency of the Council of the EU |
Today, EU Member States, with the support of the European Commission and ENISA, the EU Agency for Cybersecurity, published a report on the progress made in implementing the joint EU toolbox of mitigating measures, which was agreed by the Member States and endorsed by a Commission Communication in January 2020. The toolbox sets out a joint approach based on an objective assessment of identified risks and proportionate mitigating measures to address security risks related to the rollout of 5G, the fifth-generation of mobile networks.
While work is still ongoing in many Member States, the report notes that all Member States have launched a process to review and strengthen security measures applicable to 5G networks, demonstrating their commitment to the coordinated approach defined at EU level. For each of the toolbox measures, the report reviews progress made since the toolbox adoption, showing what has already been done and identifying areas where measures have not been implemented so far.
Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age, said: “The timely rollout of 5G networks is strategically important for all Member States as it can open new opportunities for businesses, transform our critical sectors and benefit European citizens. Our common priority and responsibility is to ensure that these networks are secure and, while this report shows we have undergone great strides, a lot of work remains ahead.”
Thierry Breton, Commissioner for the Internal Market, added: “With 5G network rollout going ahead across the EU, and our economies increasingly relying on digital infrastructure, as the coronavirus crisis demonstrated, it is more important than ever to ensure a high level of security. Together with Member States, we are committed to put in place robust measures, in a coordinated manner, not only to ensure 5G cybersecurity but also to strengthen our technological autonomy. Today’s report reaffirms our commitment and outlines the areas where further efforts and vigilance are needed.”
German Federal Minister for Economic Affairs and Energy, Peter Altmaier, said: „The 5G network rollout will provide completely new opportunities for business and society. Due to the importance of 5G as a central critical infrastructure for future technologies, it is important that the rollout of 5G infrastructure can proceed quickly and safely – in all member states. The 5G toolbox report shows that we are on the right track.“
Horst Seehofer, German Federal Minister of the Interior, Building and Community said: “The integrity of telecommunication networks is an essential part of the security architecture in all Member States. All risks – technical as well as non-technical – must be contained as much as possible. The progress report on the EU’s 5G toolbox demonstrates that the common approach is the right way to synchronise national measures as far as possible.“
Ensuring resilience of 5G networks is essential to our society, since this technology will not only have an impact on digital communications, but also on critical sectors such as energy, transport, banking, and health, as well as on industrial control systems. 5G networks will be carrying sensitive information and will be supporting safety systems that will come to rely on them. Market players are largely responsible for the secure rollout of 5G, and Member States are responsible for national security – yet, collective work and coordinated implementation of appropriate measures is fundamental to ensure EU businesses and citizens can make full use of all the benefits of the new technology in a secure way.
Indeed, the toolbox implementation is the result of collective work and of the strong determination by all Member States, together with the Commission and ENISA, to cooperate and respond to the security challenges of 5G networks and to assure the continued openness of the digital single market. In the toolbox, Member States agreed to strengthen security requirements through a possible set of recommended measures, in particular to assess the risk profiles of suppliers, to apply relevant restrictions for suppliers considered to be high risk (including necessary exclusions for key assets considered as critical and sensitive, such as the core network functions), and to have strategies in place to ensure the diversification of vendors.
Main insights of the report on the EU 5G toolbox
Today’s report analyses the progress made in implementing the toolbox measures at national level, coming to a set of conclusions.
Good progress has already been achieved for some of the toolbox measures, namely in the following areas:
The powers of national regulatory authorities to regulate 5G security, have been or are in the process of being reinforced in a large majority of Member States, including powers to regulate the procurement of network equipment and services by operators.
Measures aimed at restricting the involvement of suppliers based on their risk profile are already in place in a few Member States and at an advanced stage of preparation in many others. The report calls on other Member States to further advance and complete this process in the coming months. With regards to the precise scope of these restrictions, the report highlights the importance to look at the network as a whole and address core network elements as well as other critical and highly sensitive elements, including management functions and the radio access network, and of imposing restrictions also on other key assets, such asdefined geographical areas, government or other critical entities. For those operators having already contracted with a high risk vendors,transition periods should be put in place.
Network security and resilience requirements for mobile operators are being reviewed in a majority of Member states. The report stresses the importance to ensure that these requirements are strengthened, that they follow the latest state-of-the-art practices and that their implementation by operators is effectively audited and enforced.
On the other hand, some measures are at a less advanced stage of implementation. In particular, the report calls for:
Progress is urgently needed to mitigate the risk of dependency on high-risk suppliers, also with a view to reducing dependencies at Union level. This should be based on a thorough inventory of the networks’ supply chain and implies monitoring the evolution of the situation.
Challenges have been identified in designing and imposing appropriate multi-vendor strategies for individual MNOs or at national level due to technical or operational difficulties (e.g. lack of interoperability, size of the country)
As regards the screening of Foreign Direct Investments, steps should be taken to introduce national FDI screening mechanism without delay in 13 Member States where it is not yet in place, including in view of the approaching application of the EU investment screening framework as of October 2020. These screening mechanisms should be applied to investment developments potentially affecting the 5G value chain, taking into account the objectives of the Toolbox.
Going forward the report also recommends that Member States authorities:
Exchange more information about the challenges, best practices and solutions for implementing the Toolbox measures;
continue monitoring and evaluating the implementation of the Toolbox;
and, continue working with the Commission to implement EU-level actions listed in the toolbox, including in the area of standardisation and certification, trade defence instrumentsand competition rules to avoid distortions in the 5G supply market. Also, investing in EU capacities in the 5G and post-5G technologies, and ensuring 5G projects supported with public funding take into account cybersecurity risks.
Next Steps
The Commission will continue to work with Member States and ENISA within the framework of the NIS Cooperation Group, to monitor the implementation of the toolbox and to ensure its effective and consistent application. The Group will also promote the alignment of national approaches, through further exchanges of experiences, and by working with the Body of European Regulators for Electronic Communications (BEREC). As part of the implementation of the Commission Recommendation adopted last year, by 1 October 2020, Member States, in cooperation with the Commission, should assess the effects of the Recommendation and determine whether there is need for further action. This assessment should take into account the outcome of the EU coordinated risk assessment that was published in October 2019 as well of the effectiveness of the toolbox measures.
Background
In March 2019, following a call by the European Council for a concerted approach to the security of 5G, the Commission adopted a Recommendation on Cybersecurity of 5G networks. It called on Member States to complete national risk assessments, review national measures and to work together at EU level on a coordinated risk assessment and a common toolbox of mitigating measures.
Based on the Member States’ national risk assessment the Report on the EU coordinated risk assessment of the cybersecurity of 5G networks, presented in October 2019, identified the main threats and threats actors, the most sensitive assets, the main vulnerabilities and a number of strategic risks.
To complement this report and as a further input for the toolbox, ENISA carried out a dedicated threat landscape mapping, consisting of a detailed analysis of certain technical aspects, in particular the identification of network assets and of threats affecting these.
In January 2020, the Member States, acting through the NIS Cooperation Group, adopted the EU Toolbox of risk mitigating measures. The Commission adopted a Communication, on that same day, in which it endorsed the toolbox underlining the importance of its effective and quick implementation, and called on Member States to prepare a report on its implementation by 30 June 2020, which was therefore published today.
Compliments of the European Commission

The Federal Reserve Board on Friday finalized a rule that implements technical, clarifying updates to its Freedom of Information Act (FOIA) procedures and changes to its rules for the disclosure of confidential supervisory information (CSI), which is supervisory information belonging to the Board that may include proprietary financial institution-specific information. The final rule is generally similar to the proposal from June 2019, with a few changes in response to public comments.
The final rule updates the Board’s FOIA regulation to be consistent with the Board’s current practices and to incorporate recent changes in law and guidance. Some of these changes include updating definitions for expedited processing and the different categories of requesters. The revisions also clarify terms and help users more easily navigate the process of filing a FOIA request.
The final rule provides clarifying revisions to the definition of CSI, and, like the proposal, does not expand or reduce the information that falls within the current definition of CSI. The final rule also updates certain outdated and inefficient restrictions governing the disclosure of CSI. For example, the final rule allows supervised financial institutions to share CSI with all affiliates, rather than only with their parent bank holding companies. In a change from the proposal, the final rule will allow financial institutions to share CSI with service providers without obtaining Reserve Bank approval.
The final rule is effective 30 days after publication in the Federal Register.
For media inquiries, call 202-452-2955
Federal Register notice (PDF)
Compliments of U.S. Federal Reserve.

Consultation launched to seek feedback on the publication of compounded €STR rates by the ECB
Comments by interested stakeholders to be received by 11 September 2020
The European Central Bank (ECB) is considering the publication of compounded term rates based on the euro short-term rate (€STR) and solicits views of the public on this matter by launching a public consultation. The publication would take place on a daily basis shortly after the €STR publication. Published maturities could range from one week up to one year. A daily index, making it possible to compute compounded rates over non-standard periods, is also envisaged as part of the publication.
The public consultation, which asks for the public’s views on specific characteristics of the compounded rate, has been launched today and will expire on 11 September 2020 at 18:00 CET. Interested stakeholders are invited to respond using the template provided by the ECB. An anonymised summary of all the views expressed will be published following the solicitation period.
CONTACT:
William Lelievldt, william.lelieveldt[at]ecb.europa.eu | +49 69 1344 7316.
Compliments of the ECB.

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 Philip Berkowitz, Shareholder at Littler Mendelson in New York, and Ronnie Neville, Partner at Mason Hayes & Curran in Dublin, who will address “Working from Home and the Challenges of Remote Supervision.” |
Whether in Europe or America, there are advantages and disadvantages to working from home, both for employers and employees.  For employees, benefits include greater flexibility around how to manage the working day, and significant savings in time and cost with no longer having to commute to work (not to mention the removal of associated stress. For employers—and particularly those who had considered, pre-pandemic, that working from home was not a viable option—the benefits have included the ability to retain employees, flexibility in hours and schedules, and the ability to reassess the need to maintain costly office space.
However, employers and remote workers also face different (and for many, new) challenges that come with remote working, which include a very different dynamic, and sometimes more difficult relationship, between a subordinate and his or her manager who is supervising remotely. Certain roles appear better suited to remote working, and the more senior in tenure an employee is, the easier it may be for them to work remotely and for their manager to supervise remotely.
This new normal of interacting with colleagues, whether they are peers, subordinates, or at a higher level in the corporate hierarchy, presents challenges to employer and employee alike.  After all, getting the job done requires effective engagement with co-workers as well as customers, clients, and other third parties.  Deprived of in-person interaction, people may feel, at least initially, that they are less able to learn and to teach, to persuade and riposte, to effectively present their abilities, and to gain wisdom from colleagues.
According to the International Labour Organisation (“ILO”), more than 1 in 6 people age 18–29 stopped working during the first few months of the pandemic, and younger workers’ hours have fallen by up to 23%. The “lockdown generation” risks a decline in their skills, productivity and mental health.
New hires, many of whom may not have set foot in the physical workplace, may inevitably lose out in various ways, deprived of experiencing the organisation’s culture in a traditional office setting. It also appears that new hires, and often-younger workers, may have more difficulty with remote supervision than many more experienced or senior peers.
Many graduates starting out in their career will now have an unusual start to their first professional jobs.  Having been on-boarded remotely and working entirely from home, they will miss out, at least initially,  on the traditional in-office learning environment and the intangible benefits that come from face to face interaction with peers and managers.  This will curtail the opportunity to develop a professional network and to foster relationships with peers and senior staff/managers, which is crucial to career advancement.
Employers, too, may lose the opportunity to get to know their new employees in quite the same way as they did those with whom they worked in a physical setting.
However, the pandemic is of course negatively affecting employees regardless of their age.  Many have lost their jobs; they have suffered pay cuts and lost opportunities; and, for older workers in particular, the challenge of finding a new job in a new work culture may be particularly daunting.
Supervision and direction
Managers supervise and manage their teams in different ways, depending on their individual styles.  Many managers are quite hands-on.  This can be a very effective way of transferring knowledge and abilities, and can allow for ongoing, continual assessment of job performance, which can be beneficial to employee and manager.  On the other hand, of course, micro managing can be oppressive and may discourage individual thinking.
At the other extreme, some managers adopt a laissez faire approach to management and supervision.  While this approach may inspire confidence and creativity, many employees require supervision and direction, and so it can deprive employees of the ability to learn and grow, and result in wasted time, effort and frustration.
Many managers have introduced new and demanding protocols for the review of work product.  These protocols may be non-traditional and often have not been vetted, either by the organization as a whole or by the trial-and-error of good experience.  Most employers have been challenged by the need to monitor work remotely and principally through technology, and some have introduced technological aids such as mouse tracking software and video recording.
These practices may cause problems of trust and suspicion, and carry with them the risk of damaging the organization’s culture, as well as giving rise to potential legal and/or data privacy risks.
In addition to cultural challenge, different approaches to supervision can affect the employer’s ability to comply with important employment and labor law obligations.  For example, employers must be sure that their managers monitor the workload and worktime of subordinates.  Employers must pay employees for the hours they work; employees must abide by Company policies that may limit the number of hours they may work, and take their proper rest breaks and holidays.  Hindrances on the ability to monitor these compliance issues can heighten the risk of labor law violations.
In addition to legal restrictions on time, many employees have been as busy, if not more busy, during the Covid-19 pandemic and, for some who have been left to their own devices, there is a risk of over-working and potentially, burnout.
The practical limitations faced by managers who are unable to supervise staff as they would in the traditional way in a regular office setting is resulting in considerable angst for some employers and employees.
Perhaps paradoxically, some employers have seen an increase in day-to-day conflict among employees, no doubt caused, in part, by the difficulty in communicating.  When we are left to email or texting as the way to convey thoughts, misunderstandings can be frequent.  This is particularly the case when manager and subordinate work on different schedules, and if there is already tension in a relationship, this can be heightened by the current environment.
The future
It is clear that most businesses will not revert fully to the traditional way of working and that remote working is being, and will be, embraced more readily.  Achieving the right balance in the supervision and direction of staff, but also, in their integration and development, particularly new joiners, will take time to perfect.   For the future of work, organisations and managers will need to continue to adapt, develop and improve their methods and systems for the management of employees working from home.
Employers will be challenged to re-engage their workforce.  We will all be returning to something different, and employees may have a fear of the unknown—not to mention of what may be the next wave of the virus.  Employees who have grown used to the safety of their homes may be uncomfortable working again in an open environment, close to other employees.
Employees may also be facing bereavement as a result of illness in their family or among friends, and unprecedented financial insecurity.  This can result in polarization in the workforce.
Employers will need to build appropriate feedback channels, be prepared to accommodate employees who are anxious or find the new work environment challenging, and to communicate transparently.
There is no question, though, that remote work is indeed part of the new normal.  Companies have surprised themselves by, overall, adapting effectively to this new environment of working.  Much of corporate America is indeed in no rush to return employees to their offices, and (as the New York Times put it in a recent article), are racing not to be the first back, but the last.  “White-Collar Companies Race to Be Last to Return to the Office” (New York Times, May 8, 2020).
In light of the likelihood that remote work is here to stay, employers will need to identify structures that will require change.  They will need to strengthen remote work policies, and provide training to managers in effective supervision and communication.
Employers will also need to reassess their compensation plans, performance planning and goal setting.  There will undoubtedly be the need in many cases to restructure the workplace in light of this new way of working
Employers will also be challenged re-engage with employees, and to retain talent in this changed landscape.  They will need to identify new benefits that may have been made essential by remote work, such as childcare, elder care, alternative transportation options, and flexible work arrangements.
Employees and employers may have confounded expectations and demonstrated that they can work in this new environment, but the challenges will be frequent, different, and perhaps unpredictable.
AUTHORS:
Philip Berkowitz, Shareholder at Littler Mendelson, New York
pberkowitz@littler.com | +1 212 497 8481
Ronnie Neville, Partner at Mason Hayes & Curran, Dublin
rneville@mhc.ie | +353 1 614 5011
Stay tuned for more on this series! We hope you enjoy these Thought-Leadership pieces written by our members.