The coronavirus crisis questions the very essence of the global and European structures. This pandemic threatens critical systems of public health, food security, emergency response, economic and financial stability, regional and social cohesion, employment, sustainable development and the environment. Beyond the loss of thousands of people, the grave global consequences of the pandemic for the low-income families, the self-employed, the vulnerable groups are already visible.
The COVID-19 pandemic demands swift and unprecedented action at European scale. The depth of the crisis and the scope of the response mean that choices being made right now will shape our society for years, if not decades to come. As we take steps to ensure immediate relief and long-term recovery, it is imperative that we consider the interrelated crises of wealth inequality, democratic legitimacy, and ecological decline, which were in place long before COVID-19, and now risk being intensified. This is a time to be decisive in saving lives, and bold in charting a path to a genuinely healthier and more equitable future through a just recovery.
There is a need for an ambitious fiscal package with a frontloaded orientation in order to prevent the catastrophic effects of the pandemic rather than straggle to alleviate them ex post.
The EU needs an Emergency Response Plan, which will protect lives, jobs and incomes. We face an unprecedented, global public health emergency. We need an unprecedented response. The top priority has to be protecting life. Old recipes based on neo-liberal policies and lack of solidarity among member-states have failed in the past. The EU needs common policies based on solidarity and social justice, in order to immediately support our health systems, our citizens (especially the most vulnerable), employees, enterprises (especially SMEs) and self-employed. The EU after this enormous crisis will not be the same again. It is at crossroads and has to choose, either it will find common solutions for more fair, effective and democratic Europe, or will go back to the short-lived solutions of the member- states’ approach, where in some cases have already found the pandemic as a good pretext for restricting democratic functions and rights, as in Hungary.
In a growing number of EU member states, healthcare systems under chronic pressure from deregulation, privatization and disinvestment are reaching their limits and healthcare and security service personnel and other professionals are becoming increasingly vulnerable to the coronavirus, often lacking basic Personal Protection Equipment
The European United Left/Nordic Green Left (GUE/NGL) is calling for a massive, coordinated European Emergency Response Plan, whatever the cost.
When we have welcomed some of the measures already taken by the EU institutions, we believe that they are nowhere near sufficient to deal with the scale of this crisis. Member states need to invest massively in the response to the pandemic, and they must be further enhanced, supported unconditionally by all EU member-states and the full power of the EU institutions, including the ECB and the EIB.
EU Emergency Response Plan
The Left in the European Parliament is calling for an EU-wide economic Emergency Response Plan based on the following principles and specific measures:
5 principles for a just Pandemic Relief and Social Recovery
(1) Health is the top priority, for all people, with no exceptions;
We support the calls of public health organizations, notably the WHO, and others for free and accessible testing, treatment, and protective equipment; expanded hospital capacity, including in rural, insular areas and islands; paid sick leave and paid family medical leave for all workers without exception; expanded public funding for the Public Health System. Critically, the governments must ensure such health protections cover all people, including low-wage workers, health workers, independent contractors, family farmers, asylum seekers, undocumented immigrants, Indigenous peoples, people who are incarcerated, people who are homeless or housing insecure, and others likely to be hit first and worst by COVID-19 and the economic downturn.
(2) Provide economic relief directly to the people;
We support the urgent calls to expand the social safety net by broadening unemployment insurance, vastly increasing food aid programs, extending housing assistance, expanding childcare for working families, relieving personal debt, and halting evictions, foreclosures, and shut offs of water and electricity. As with expanded public health measures, these economic measures must be implemented to ensure coverage of workers and communities likely to be hit first and worst by COVID-19 and the economic downturn. In addition, to counteract the economic downturn, the governments should immediately direct sizable cash payments to every person. Larger payments should be made to lower-income workers and the poor, who are disproportionately exposed to both COVID-19 health risks and heightened job insecurity. These payments should be made swiftly and regularly throughout the duration of the economic recession.
(3) Rescue workers and communities, not corporate profits;
Any financial assistance directed at specific industries must be channeled to workers and vulnerable populations, not shareholders or corporate executives. Specifically, any state guaranteed loans must be used to maintain payroll and benefits, not executive bonuses or stock buybacks. In addition, such funds should come with pro-worker conditions, such as requiring worker representation on the company’s board of directors, and compliance with high-road labor standards such as payment of prevailing wages, use of project-labor agreements, adoption of a neutrality policy with regard to union collective bargaining, and adoption of a hiring policy to ensure fair employment opportunities for all.
(4) Make a down payment on a regenerative economy, while preventing future crises;
While we urgently need a large, short-term stimulus to protect the health and economic security of those on the front lines of the COVID-19 crisis, it is imperative that we also plan for a large, medium-term stimulus to counteract the economic downturn and ensure a just recovery. This stimulus should create millions of good, family-sustaining jobs with high quality labor standards; counter systemic inequities by directing investments to the working families who face the most economic insecurity; and tackle the climate crisis that is compounding threats to our economy and health. All three goals can be achieved simultaneously with public investments to rebuild our infrastructure, expand wind and solar power, build clean and affordable public transit, weatherize our buildings, build and repair public housing, manufacture more clean energy goods, restore our wetlands and forests, expand public services that support climate resilience, and support regenerative agriculture led by family farmers. Critically, stimulus packages should include conditions for industries to implement high quality labor standards, workforce development, and reductions in climate emissions and toxic pollution. The response to one existential crisis must not fuel another.
(5) Protect our democratic process while protecting each other.
People must not be forced to choose between exercising their rights as citizens and protecting public health, no emergency should ever be used to erode democratic institutions or to undermine fundamental rights; whereas all measures must always be adopted through a democratic process and in a proportionate way.
It is democracy that the pandemic threatens foremost.
Protect lives, whatever the cost
• The crisis highlights the need for coordination and a common European health policy with a significant increase in the European budget. The crisis confronts us with labor restructuring practices at the expense of employees, at the same time as specific private funds are favored by the crisis.
• The delayed reaction of the European Union to address the pandemic is deplorable. We are deeply worried about the lack of solidarity of certain member states to those affected most by the crisis. We call for the establishment of a Common Health Policy as an internal policy of the European Union that will ensure the coordination between the member states and the implementation of robust policies.
• Immediate, massive public spending to bolster healthcare systems that are unprepared for this situation and which have, in many countries, been ravaged by a decade of EU-imposed austerity. Crucially, this means not only treatment, but active testing and tracing. All EU institutions and funds must be directed towards this effort.
• Investment to ensure that the safety of frontline healthcare workers is protected, and that every precautionary measure is also taken for essential workers in other sectors such as working in supermarkets, pharmacies, food preparation and delivery, medical manufacturing, police, firefighters, security forces etc, and for workers who are not permitted to work from home.
• Around 4 billion euros of unallocated margins and flexibilities remain available in the 2020 budget. These funds must be immediately mobilised.
• Additionally, around 3 billion euros are available from the 2019 budgetary surplus. The Commission should take all necessary action (including legislative proposals) to direct them for the fight against coronavirus and its social and economic impact.
• All Member States must be ready to further enhance the EU budget with fresh money to meet the increased needs.
• At the same time, flexibility in redirecting resources is needed more than ever in order to avoid time-consuming procedures and procedural dead-ends.
• The unprecedented circumstances call for the immediate update of their MFF 2021-2017 proposals in order to meet the increased needs that will follow our societies and our economies for the years to come. The Commission and the Council need to target and accelerate their efforts towards this end with the goal to conclude at last the long-lasting negotiations for a stable and sufficient multi-annual EU budget. This also calls for immediate actions for an MFF contingency plan in order to ensure, in the meantime, the continuation of the EU programmes. We call on the Commission to propose a new ambitious MFF 2021-2027 with increased funding for cohesion, climate and health policies, while noting that the Commission’s proposal for 1,11%of the EU-27's GNI or even the Parliament’s 1,3% is not enough to address the actual crisis.
• State control of key sectors for an effective response.
• States must be prepared to take radical measures in vital sectors to respond to the public health emergency, including nationalising sectors if deemed necessary, to direct the response effort. This includes private healthcare facilities; producers of protective equipment, respirators and ventilators; food production and distribution; postal services; and medical research and development.
Protect jobs, incomes and social security
• The economic crisis caused by the coronavirus cannot be an excuse for employers and companies to reduce salaries, lay off employees and further infringe labour rights. Globally, in many countries the number of unemployed and poverty-stricken people is rising dramatically. Social dialogue between member states and the social partners must be respected fully regarding collective bargaining, existing agreements and workplace health and safety issues.At the same time, workers must be fully protected. Member States must take immediate action to guarantee same-level incomes and social security coverage, to prohibit dismissals and to prevent all kinds of abusive employer behavior..
• Employers, the state and the EU must ensure that workers in all other sectors work from home, or stay at home for social distancing purposes; that all workers are paid in full whether they are at home for social distancing or for illness. They should pay particular attention to workers in precarious and gig jobs, to ensure that they are guaranteed a sufficient income for the duration of this emergency so they are not forced to work. Jobs should be protected by state intervention. In order to avoid mass redundancies and widespread bankruptcy of businesses forced to close for the duration of the crisis, the state should act to provide the necessary means for companies to survive and to continue paying their employees, Businesses, especially SMEs, and the self-employed must be sufficiently protected, inter alia, by providing zero-rated loans, freezing all current liabilities towards banks, utilities, tax and social security authorities and protecting against evictions due to debts caused by their business suspension. The Danish agreement reached between the government and social partners is a useful model to ensure that no one is fired. These measures are preferable to the current widespread strategy that only ensures bank liquidity and loans to businesses that they will not be able to repay.
• Financial assistance must urgently be provided to welfare recipients, households living in poverty, and the most vulnerable in order for them to be able to purchase enough food and essentials for the duration of self-isolation periods. The unemployed and the most vulnerable should receive higher benefits to meet their increased needs. Housing/family/social allowances must be raised.
• Emergency cash payments should be made to all EU citizens in the immediate future to ensure everyone has access to the basic necessities of life during this crisis, without bureaucratic delays.
Protect housing and access to vital services for those without incomes
• All households and all economically and socially vulnerable persons must be provided with the necessary means that guarantee a decent standard of living. These include, inter alia, freezing current liabilities towards banks and utilities and protecting citizens’ first residences (either by freezing debts deriving form loans for their purchase for owned houses or by granting rental allowances to those living in rented homes).
• Banks have already drawn down more than 100 billion euros from the ECB package to ensure ongoing liquidity and the ability to roll over their customers’ debt.
• In the case that full incomes for all workers and the unemployed are not protected by the measures above, we need to ensure that access to housing and basic services are protected for all. This means:
• Mortgage payments must be suspended for the duration of the crisis, and evictions prohibited. Substantial financial assistance should be provided for rental payment.
• Vital household utilities including electricity, gas, water, phone and broadband must remain connected and payments waived or deferred.
• Household debt repayments should be suspended for the duration of the crisis.
Actions to support vulnerable social groups against violence and protect mental health
• Emergency and restrictive measures to prevent the spread of COVID-19 have placed societies in unprecedented conditions of social distancing, and official data from various countries report an increasing outbreak of domestic violence.
• In these unprecedented conditions experienced by citizens, the imposed social isolation measures and restrictions, the inability to contact relatives and friends who offer encouragement and support, the feelings of fear even for the loss of the lives of their own and their loved ones, combined also with the growing uncertainty about their work and financial future, are factors that can easily put mental balance at risk, and trigger unpredictable behaviors and even violent reactions and actions.
• In an already overburdened family and social environment of great concern and uncertainty, the applied restrictions in social distancing, feed or magnify the frequency and intensity of violence “behind closed doors”, mainly gender and domestic violence.
• Initiatives and resources are needed to create stronger mechanisms aimed at shielding the mental health of all citizens experiencing this unprecedented crisis, as well as protecting vulnerable groups, especially women, children and seniors.
• It is therefore essential to take special care in adopting support measures for services and structures to support mental health of the population, both financially and through the empowerment of human resources.
• This means strengthening financially not only the health system structures, but also the mental health care structures and units in particular.
• In addition, it is necessary to carry out information and public awareness campaigns on these issues, so that that citizens are aware of the risk and the limits of their rights, the available services and structures and where they can seek help, if they are victims of violent behavior.
• Mental health should be prioritized equally and accordingly to the overall protection of physical health and integrity of the individual.
• The protection of life, and the protection of physical and mental health, are fundamental human rights that must be integrated into EU policies and must not be excluded from any planning in the wider European response to crises of this extraordinary scale.
Leave no one behind
• The EU and member states must ensure that nobody is left behind. Specific measures must be taken to protect the lives, health and social security of homeless people, asylum seekers, prisoners and other persons who do not have a place of their own to effectively carry out social distancing. Solidarity must be the basis of our actions in the EU, and must extend to other nations facing this crisis also.
Prevent new sovereign debt and financial crises
• It is an urgent necessity the immediate issuance of a "coronabond" by the ECB, as an emergency eurobond to strengthen social infrastructure in the member states and restart their economy. Expressing solidarity to states and citizens is the most performing investment for the EU, in stark contrast to the current image of an indifferent and bureaucratic EU. We emphasize the need for new EU own resources to be developed in order to fund both the health systems and the economic recovery after the crisis; We call for a immediate creation of Covid19-bonds and EU Green Deal bonds guaranteed by a purchase programme of the European Central Bank that will enable the member states to rapidly recover from the pandemic crisis and also transform their economies without leaving anyone behind.
• As the COVID19 pandemic and the resulting economic recession, the climate emergency, and extreme inequality are highly interconnected and a direct threat to democratic institutions we call on the European Commission to increase the budget of the Sustainable Investment Plan to 2 trillion euros that will fund a progressive European Social and Green Deal with the aim of creating millions of new jobs, restoring social cohesion, preparing our health systems to handle future pandemics, building resilience and addressing climate emergency.
• In this context, a European Marshall Plan-type funding program will be required with a sufficient amount, in order to strengthen public health systems, social infrastructure and the economy. This intervention will go beyond the important national fiscal measures and will complement each other, as there is no prospect of agreement among Member-States on the substantial resilience of the Stability Pact. We stress that the Growth and Stability Pact hinders economic recovery and ask for its replacement by a Climate and Employment Security Pact that will exclude environmental, health and social public investment from the calculation of public deficit; we call on the European Commission and the member states to increase efforts for the implementation of the Sustainable Development Goals.
• It is economically and politically counter-productive that the EU urges Member States to lend through ESM up to 2% of GDP accepting to subordinate in ECCL terms. In this way the mainstream EU approach insists on diverging economies and punishing the citizens of the weakest economies. The ECB’s Pandemic Emergency Purchasing Programme announced on March 18 was a step forward but is not enough to counteract this threat.
• The EU institutions, particularly the ECB, need to act urgently to prevent new financial and sovereign debt crises developing. Beyond issuing a coronabond, the ECB must commit to acting as the lender of last resort for member states, not only for the banks. Its sovereign bond-buying programmes must be unconditional, unlimited and based on the spending needs of member states.
• The ESM should play a key role against the pandemic. Τhe euro area member states should use the remaining capacity of the ESM (more than 400 million) to fund an EU-wide programme to support and restart the economy.
• Providing liquidity to banks and financial markets is not efficient to support the real economy and could cause new financial bubbles; SMEs must be directly supported.
• Financial markets should be more strictly regulated to prevent speculative attacks.
We agree with the 10-Point Action Plan as proposed by ECON GUE MEPs, adding the urgent need for a eurobond to deal with the coronavirus pandemic
Our 10-Point Action Plan:
These demands outline only the bare minimum to ensure that our healthcare systems have a chance of responding to this emergency effectively, and that people are incentivised to remain at home without being penalised or left in need.
Yet they require fundamental changes in the political approach, rules and practices of the EU institutions.
We need to mobilise a major EU-wide fiscal response based on solidarity, where funds flow to the states, communities and individuals in urgent need.
We demand an EU Emergency Response Plan that takes the following actions:
1) Suspend the Stability and Growth Pact
Immediately suspend the debt and deficit rules in the Stability and Growth Pact and Macroeconomic Imbalance Procedure, in order for governments to be able to spend (including borrowing) the amount required to meet this challenge. Suspending the fiscal adjustment recommended and allowing extra spending only to targeted sectors as proposed by the Commission is not enough and will likely reduce the speed of spending by EU governments.
2) Suspend EU state aid rules
Immediately suspend EU state aid rules in order to allow governments to support, or nationalise if deemed necessary, vital sectors such as healthcare, research and development, production of medical equipment etc.
3) Immediate enhancement, mobilisation, and redirection of funds
To boost the fiscal effort, member states must have immediate access to the EU’s structural funds, including the European Solidarity Fund, to respond to the crisis. The existing EU Budget must be enhanced and redirect further funds into cohesion funding that can be drawn down by member states, on the basis of need.
4) Unconditional payment to all EU citizens by the ECB
The ECB should make an unconditional payment of at least €2000 to every EU citizen to ensure that each person can meet their basic needs while engaged in social distancing or quarantine. This should be repeated monthly while social distancing is required. For high-income or high-wealth individuals, these funds can be later transferred to state budgets through the taxation system.
5) Reform ECB ‘capital key’ to be based on member states’ funding needs
The ECB’s public sector securities purchases - of member states’ sovereign debt – is determined by its self-imposed capital key, which calculates the size of member states’ shares according to the size of national populations and economies. By extension the capital key also determines how much the ECB spends on government bonds, and where. The ECB must commit to making unlimited, unconditional purchases of sovereign debt, based on the healthcare and social needs of member states, instead of its capital key. This is the only way to ensure that member states can continue to spend, and to close the rising spreads on sovereign bond yields. This is crucial to prevent a repeat of the sovereign debt crisis.
6) Any ESM loans must be made through new mechanism, interest-free and unconditional
The direct use of sovereign bond-buying by the ECB is preferable to the deployment of the European Stability Mechanism (ESM). The existing ESM credit lines to member states come with enshrined conditionality – austerity – à la the Troika bailouts and Memoranda. If the €500 billion ESM is to be used in this crisis, a new mechanism must be created that will permit unconditional, zero-interest credit lines to be provided to member states in need of funding.
7) Repurpose ECB corporate sector purchasing programme to favour SMEs
Providing liquidity to banks and financial markets is not an efficient way to support the real economy and has contributed to new asset bubbles. The ECB should repurpose its quantitative easing policies, in particular its corporate sector purchasing programme, to significantly increase its direct support to SMEs, conditional on the business’s commitment to the protection of employment, rights and income.
8) Assistance for SMEs from the European Investment Bank
The EIB must be used to its maximum potential to provide funds to micro and small businesses, conditional on the business’s commitment to the protection of employment, rights and income.
9) Ban short-selling and speculative attacks
During this period of extreme volatility in financial markets, short-selling should be prohibited. Specific goods or sectors that are crucial to answer the crisis and/or that are already affected by the economic downturn should be protected from speculative attacks. The European Securities and Markets Authority should set guidelines and work with national competent authorities to reduce these risks to financial stability. Member states should shut down stock markets when high volatility thresholds have been met.
10) End EU sanctions that harm affected countries
The coronavirus is a pandemic. A health crisis in one country impacts on the rest of the world. The EU must immediately lift sanctions on third countries affected by the coronavirus crisis, which directly or indirectly limit access to medical and humanitarian goods, thereby collectively punishing civilians and exacerbating the pandemic, and push internationally for other countries to do the same.
The EU's inability to build solidarity and strengthen its common economic interventions during the Covid-19 pandemic reinforces Euroscepticism among citizens as the earliest pandemic challenges the hierarchies of both citizens and politics. The Left in the European Parliament will stand beside workers, the unemployed, nurses and doctors, and vulnerable communities to fight for an effective and just response to this public health catastrophe.
As we eventually recover from this situation in future months, we have to turn our focus to bringing an end to the economic system that prioritises growth and the financial benefits of a tiny elite at the expense of the rest of our society and our planet.
Europe is at the moment the epicenter of the pandemic. It is the European Union that must win this battle and lead the world towards global sustainability. In this moment we need more of Europe. Just as the mad cow disease brought food security under EU competency so Covid must do for public health (broadly understood) and the same stands for effective climate action. This is also an economic battle. As much as we need EU Coronabonds, we must have EU GreenDeal bonds. To get all these, we also need EU further integration. It is in the common interest of the EU people to move forward together, by organizing a big EU federal state instead of going back to national borders and try to address all these problems each one alone. To achieve victory we need massive investments in sectors that should matter more to society like healthcare, science, education and innovation and a global mindset shift towards solidarity, trust and international cooperation. A progressive EGD and the SDGs are both mutually agreed, already voted, evidence based road maps to victory and our compass to an emerging world full of uncertainties, existential threats and wonderful opportunities. We need a holistic approach to reduce our vulnerability to natural and human made hazards, construct our resilience and adaptive capacity without leaving anyone behind. To achieve this we should address the root causes of calamities that are not isolated but deeply interconnected and ultimately concern the political institutions at national, regional, local and global scale. And we must do it within the spirit of the Climate Emergency Resolution and the determination, solidarity and resources that we now marshal to fight the Covid battle.