May 6, 2020 |
The coronavirus pandemic represents a major shock for the global and EU economies, with very severe socio-economic consequences. Despite the swift and comprehensive policy response at both EU and national level, the EU economy will experience a recession of historic proportions this year.
The Spring 2020 Economic Forecast projects that the euro area economy will contract by a record 7¾% in 2020 and grow by 6¼% in 2021. The EU economy is forecast to contract by 7½% in 2020 and grow by around 6% in 2021. Growth projections for the EU and euro area have been revised down by around nine percentage points compared to the Autumn 2019 Economic Forecast.
The shock to the EU economy is symmetric in that the pandemic has hit all Member States, but both the drop in output in 2020 (from -4¼% in Poland to -9¾% in Greece) and the strength of the rebound in 2021 are set to differ markedly. Each Member State’s economic recovery will depend not only on the evolution of the pandemic in that country, but also on the structure of their economies and their capacity to respond with stabilising policies. Given the interdependence of EU economies, the dynamics of the recovery in each Member State will also affect the strength of the recovery of other Member States.   
Valdis Dombrovskis, Executive Vice-President for an Economy that works for People, said: “At this stage, we can only tentatively map out the scale and gravity of the coronavirus shock to our economies. While the immediate fallout will be far more severe for the global economy than the financial crisis, the depth of the impact will depend on the evolution of the pandemic, our ability to safely restart economic activity and to rebound thereafter. This is a symmetric shock: all EU countries are affected and all are expected to have a recession this year. The EU and Member States have already agreed on extraordinary measures to mitigate the impact. Our collective recovery will depend on continued strong and coordinated responses at EU and national level. We are stronger together.”
Paolo Gentiloni, European Commissioner for the Economy, said:“Europe is experiencing an economic shock without precedent since the Great Depression. Both the depth of the recession and the strength of recovery will be uneven, conditioned by the speed at which lockdowns can be lifted, the importance of services like tourism in each economy and by each country’s financial resources. Such divergence poses a threat to the single market and the euro area – yet it can be mitigated through decisive, joint European action. We must rise to this challenge.”
A large hit to growth followed by an incomplete recovery
The coronavirus pandemic has severely affected consumer spending, industrial output, investment, trade, capital flows and supply chains. The expected progressive easing of containment measures should set the stage for a recovery. However, the EU economy is not expected to have fully made up for this year’s losses by the end of 2021. Investment will remain subdued and the labour market will not have completely recovered.
The continued effectiveness of EU and national policy measures to respond to the crisis will be crucial to limit the economic damage and facilitate a swift, robust recovery to set the economies on the path of sustainable and inclusive growth.
Unemployment is set to increase, though policy measures should limit the rise
While short-time work schemes, wage subsidies and support for businesses should help to limit job losses, the coronavirus pandemic will have a severe impact on the labour market.
The unemployment rate in the euro area is forecast to rise from 7.5% in 2019 to 9½% in 2020 before declining again to 8½% in 2021. In the EU, the unemployment rate is forecast to rise from 6.7% in 2019 to 9% in 2020 and then fall to around 8% in 2021.
Some Member States will see more significant increases in unemployment than others. Those with a high proportion of workers on short-term contracts and those where a large proportion of the workforce depend on tourism are particularly vulnerable. Young people entering the workforce at this time will also find it harder to secure their first job.
A steep drop in inflation
Consumer prices are expected to fall significantly this year due to the drop in demand and the steep fall in oil prices, which together should more than offset isolated price increases caused by pandemic-related supply disruptions.
Inflation in the euro area, as measured by the Harmonised Index of Consumer Prices (HICP), is now forecast at 0.2% in 2020 and 1.1% in 2021. For the EU, inflation is forecast at 0.6% in 2020 and 1.3% in 2021.
Decisive policy measures will cause public deficits and debt to rise
Member States have reacted decisively with fiscal measures to limit the economic damage caused by the pandemic. ‘Automatic stabilisers’, such as social security benefit payments compounded by fiscal discretionary measures are set to cause spending to rise. As a result, the aggregate government deficit of the euro area and the EU is expected to surge from just 0.6% of GDP in 2019 to around 8½% in 2020, before falling back to around 3½% in 2021.
After having been on a declining trend since 2014, the public debt-to-GDP ratio is also set to rise. In the euro area, it is forecast to increase from 86% in 2019 to 102¾% in 2020 and to decrease to 98¾% in 2021. In the EU, it is forecast to rise from 79.4% in 2019 to around 95% this year before decreasing to 92% next year.
Exceptionally high uncertainty and risks tilted to the downside
The Spring Forecast is clouded by a higher than usual degree of uncertainty. It is based on a set of assumptions about the evolution of the coronavirus pandemic and associated containment measures. The forecast baseline assumes that lockdowns will be gradually lifted from May onwards.
The risks surrounding this forecast are also exceptionally large and concentrated on the downside.
A more severe and longer lasting pandemic than currently envisaged could cause a far larger fall in GDP than assumed in the baseline scenario of this forecast. In the absence of a strong and timely common recovery strategy at EU level, there is a risk that the crisis could lead to severe distortions within the Single Market and to entrenched economic, financial and social divergences between euro area Member States. There is also a risk that the pandemic could trigger more drastic and permanent changes in attitudes towards global value chains and international cooperation, which would weigh on the highly open and interconnected European economy. The pandemic could also leave permanent scars through bankruptcies and long-lasting damage to the labour market.
The threat of tariffs following the end of the transition period between the EU and United Kingdom could also dampen growth, albeit to a lesser extent in the EU than in the UK. 
For the UK, a purely technical assumption
Given that the future relations between the EU and the UK are not yet clear, projections for 2021 are based on a purely technical assumption of status quo in terms of their trading relations. This is for forecasting purposes only and reflects no anticipation or prediction with regard to the outcome of the negotiations between the EU and the UK on their future relationship.
Background
This forecast is based on a set of technical assumptions concerning exchange rates, interest rates and commodity prices with a cut-off date of 23 April. For all other incoming data, including assumptions about government policies, this forecast takes into consideration information up until and including 22 April. Unless policies are credibly announced and specified in adequate detail, the projections assume no policy changes.
The European Commission publishes two comprehensive forecasts (spring and autumn) and two interim forecasts (winter and summer) each year. The interim forecasts cover annual and quarterly GDP and inflation for the current and following year for all Member States, as well as EU and euro area aggregates.
The European Commission’s next economic forecast will be the Summer 2020 Interim Economic Forecast which is scheduled to be published in July 2020. This will cover only GDP growth and inflation. The next full forecast will be in November 2020.
For More Information
Full document: Spring 2020 Economic Forecast
Compliments of the European Commission.

The Regulatory Scrutiny Board (RSB) has released their 2019 Annual Report.
The Regulatory Scrutiny Board is part of the process of policy-making based on evidence. It provides quality assurance of impact assessments, fitness checks and major evaluations to the political level of the Commission. It helps ensure that initiatives take due account of data and stakeholder groups’ views before political decision-makers consider what action to take. The Board scrutinises all impact assessments and fitness checks and a selection of evaluations.
To view and download the report, click here: Regulatory Scrutiny Board – Annual Report 2019
Compliments of the RSB, European Commission.

The Regulatory Scrutiny Board (RSB) has released their 2019 Annual Report.
The Regulatory Scrutiny Board is part of the process of policy-making based on evidence. It provides quality assurance of impact assessments, fitness checks and major evaluations to the political level of the Commission. It helps ensure that initiatives take due account of data and stakeholder groups’ views before political decision-makers consider what action to take. The Board scrutinises all impact assessments and fitness checks and a selection of evaluations.
To view and download the report, click here: Regulatory Scrutiny Board – Annual Report 2019
Compliments of the RSB, European Commission.

The Regulatory Scrutiny Board (RSB) has released their 2019 Annual Report.
The Regulatory Scrutiny Board is part of the process of policy-making based on evidence. It provides quality assurance of impact assessments, fitness checks and major evaluations to the political level of the Commission. It helps ensure that initiatives take due account of data and stakeholder groups’ views before political decision-makers consider what action to take. The Board scrutinises all impact assessments and fitness checks and a selection of evaluations.
To view and download the report, click here: Regulatory Scrutiny Board – Annual Report 2019
Compliments of the RSB, European Commission.

May 3, 2020 |
Op-ed co-authored by Giuseppe Conte, President of the Government of the Italian Republic, Emmanuel Macron, President of the French Republic, Angela Merkel, Federal Chancellor of the Federal Republic of Germany, Charles Michel, President of the European Council, Erna Solberg, Prime Minister of the Kingdom of Norway, Justin Trudeau, Prime Minister of Canada* and Ursula von der Leyen, President of the European Commission.
“Chance favours the prepared mind”. This was the mantra of Louis Pasteur, one of the world’s greatest scientists and a mastermind behind vaccines and breakthroughs which have saved millions of lives spanning three centuries.
Just as it was back then, the world is today confronted with a virus that sweeps across countries and continents, breaking into our homes and our hearts. This virus has caused devastation and pain in all  corners of the world, locking us away from the touch of the people we love, the joy of the things we usually do and the sights of the places we want to be.
This sacrifice, and the heroic efforts of medical and care staff around the world, have helped us bend the trend in many parts of the world. While some are cautiously emerging from lockdown, others are still in isolation and see their daily social and economic lives severely restricted. Consequences could be particularly dramatic in Africa and the Global South as a whole.
But what we all have in common is that none of us can really think or plan ahead with any great certainty about what the future of the pandemic really holds.
This means that we all have a stake in this. None of us is immune to the pandemic and none of us can beat the virus alone. In fact, we will not truly be safe until all of us are safe – across every village, city, region and country in the world. In our interconnected world, the global health system is as strong as its weakest part. We will need to protect each other to protect ourselves.
This poses a unique and truly global challenge. And it makes it imperative that we give ourselves the best chance to defeat it. This means bringing together the world’s best – and most prepared – minds to find the vaccines, treatments and therapies we need to make our world healthy again, while strengthening the health systems that will make them available for all, with a particular attention to Africa.
We are building on the commitment by G20 leaders to develop a massive and co-ordinated response to the virus. We are supporting the call to action that the World Health Organization and other global health actors have made together. For this reason, we have recently launched the Access to COVID-19 Tools (ACT) Accelerator, a global cooperation platform to accelerate and scale-up research, development, access and equitable distribution of the vaccine and other life-saving therapeutics and diagnostics treatments. This laid the foundation for a real international alliance to fight COVID-19.
We are determined to work together, with all those who share our commitment to international co-operation. We are ready to lead and support the global response.
Our aim is simple: on the 4th of May we want to raise, in an online pledging conference, an initial 7.5 billion euros (8 billion dollars) to make up the global funding shortfall estimated by the Global Preparedness Monitoring Board (GPMB) and others.
We will all put our own pledges on the table and we are glad to be joined by partners from the world over. The  funds that we raise will kick-start an unprecedented global cooperation between scientists and regulators, industry and governments, international organisations, foundations and health care professionals. We support the World Health Organisation and we are delighted to join forces with experienced organizations such as the Bill and Melinda Gates Foundation, the Wellcome Trust.
Every single euro or dollar that we raise together will be channelled primarily through recognised global health organisations such as CEPI, Gavi, the Vaccines Alliance, as well as the Global Fund and Unitaid into developing and deploying as quickly as possible, for as many as possible, the diagnostics, treatments and vaccines that will help the world overcome the pandemic. If we can develop a vaccine that is produced by the world, for the whole world, this will be an unique global public good of the 21st century. Together with our partners, we commit to making it available, accessible and affordable to all.
This is our generation’s duty and we know we can make this happen. High quality and low-cost health technologies are not a daydream. And we have seen how public-private partnerships have managed to make many life-saving vaccines available to the poorest people on earth over the last two decades.
We know this race will be long. As from today, we will sprint towards our first goal but we will be ready for a marathon. The current target will only cover the initial needs: manufacturing and delivering medicines on a global scale will require resources well above the target.
Together, we have to ensure that resources will continue being mobilised and that progress will be made to achieve universal access to vaccination, treatment and testing.
This is a defining moment for the global community. By rallying around science and solidarity today we will sow the seeds for greater unity tomorrow. Guided by the Sustainable Development Goals, we can redesign the power of community, society and global collaboration, to make sure that nobody is left behind.
This is the World against Covid-19. And together we will win.  
Compliments of the European Commission.

May 4, 2020 |
As the EU looks at how best to recover from the impact of the Covid-19 pandemic, MEPs say the Green Deal must be at the centre of any reconstruction package.

The current health crisis and its consequences remain the immediate priority, but the European Parliament is also focusing on a strategy for the post-crisis period.
In a resolution adopted on 17 April, MEPs said the EU needs a massive recovery and reconstruction package with the Green Deal, a series of initiatives to make Europe’s economy sustainable, at its core to stimulate the economy and fight climate change.
Impact on carbon emissions
During the strict quarantine measures implemented across Europe, air pollution has declined due to reduced traffic and other economic activities. Major European cities have registered major decreases in nitrogen dioxide (NO2) concentration, some by half.
The closure of offices, shutdown of industry and huge decline in travel have cut CO2 emissions. In the first quarter of 2020 it is expected to have cut demand for electricity as well.
Due to expectations about falling electricity demand and industrial activity, the price for allowances in the EU Emission Trading System fell by 40% between mid-February and mid- March 2020.
EU Climate Law
On 28 November 2019, the Parliament declared a climate emergency and called for all relevant EU legislation to be in line with the aim of keeping global warming to under 1.5°C.
The European Commission outlined the Green Deal in December, followed in March by a proposal for an EU Climate Law to make the EU climate neutral by 2050.
In January, Parliament called for more ambitious emission reduction targets than those proposed by the Commission to ensure the EU can meet the goal.
In a meeting held by Parliament’s environment committee on 21 April, Frans Timmermans, the Executive Vice-President of the Commission, said that the timetable for the EU Climate Law remains unchanged and promised a revised reduction target proposal for 2030 in September.
The Climate Law must be approved by the Parliament and the Council of Ministers before it can come into effect. Parliament wants the EU should adopt these targets well in advance of the COP26 UN Climate change conference, which has been postponed until 2021 due to the pandemic.
Compliments of the European Parliament.

Together with our members we are creating a Video series of first-hand accounts of the Pandemic’s impact, both personally & professionally.
 
We invite you to join us today for a first-hand look at the impact of the global shutdown following the Coronavirus (COVID-19) outbreak – Today we are featuring Philippe Sollie, CEO, @FlenHealth a EACCNY member.

The questions we asked our members for this series are:1) What are some challenges you, personally and your organization have faced?2) What are some of the most surprising (positive, innovative) responses/changes you have witnessed?3) How will this experience change us going forward, as a society and in terms of how we do business?

EACCNY has its finger on the pulse of how this worldwide pandemic is effecting comanpies and organisations on both sides of the Atlantic. EACC is where Americans & Europeans connect to do buisiness.
Stay tuned for more on this series! We hope you enjoy these short vignettes our members and friends of the EACC created to share their experience.

April 30, 2020 |
The Federal Reserve on Thursday expanded access to its Paycheck Protection Program Liquidity Facility (PPPLF) to additional lenders, and expanded the collateral that can be pledged. The changes will facilitate lending to small businesses via the Small Business Administration’s (SBA) Paycheck Protection Program (PPP).
As a result of the changes, all PPP lenders approved by the SBA, including non-depository institution lenders, are now eligible to participate in the PPPLF. SBA-qualified PPP lenders include banks, credit unions, Community Development Financial Institutions, members of the Farm Credit System, small business lending companies licensed by the SBA, and some financial technology firms. When the PPPLF was announced, the Federal Reserve said the facility would immediately lend to depository institutions and that non-depository institutions would be added as soon as possible.
Additionally, eligible borrowers will be able to pledge whole PPP loans that they have purchased as collateral to the PPPLF. An institution that pledges a purchased PPP loan will need to provide the Reserve Bank with documentation from the SBA demonstrating that the pledging institution is the beneficiary of the SBA guarantee for the loan.
The SBA’s PPP guarantees loans from qualified lenders to small businesses so that those businesses can keep workers employed. The PPPLF supports the PPP by extending credit to financial institutions that make or purchase PPP loans, using the loans as collateral. The additional liquidity from the PPPLF increases the capacity of financial institutions to make additional PPP loans.
Further details on the PPPLF are available HERE
For frequently asked questions, please visit: PPPLF Frequently Asked Questions
Compliments of The Federal Reserve Board.

April 30, 2020 |
The European Securities and Markets Authority, the EU’s securities markets regulator, has today made available, under the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR):
• The annual transparency calculations of the large in scale (LIS) and size specific to the instruments (SSTI) thresholds for bonds;
• systematic internaliser calculations for equity, equity-like instruments and bonds; and
• new data for bonds subject to the pre- and post-trade requirements of MiFID II and MiFIR.

Annual transparency calculations of the large in scale (LIS) and size specific to the instruments (SSTI) thresholds for bonds
ESMA has published the results of the annual transparency calculations of the large in scale (LIS) and size specific to the instruments (SSTI) thresholds for bonds.
The results are published on a per bond-type basis in excel format in the Annual transparency calculations for non-equity instruments register. The results on a per ISIN basis will be published through the Financial Instruments Transparency System (FITRS) in the XML files (link available here) and through the Register web interface (link available here) starting on 30 April 2020.
ESMA will publish until 31 May 2020 two records with this type of calculation for each ISIN (the one applicable until that date, and the one applicable starting on 1 June). To avoid any misinterpretation of the results, users of the calculations are kindly invited to review the FIRDS Transparency System downloading instructions document in particular paragraph 28.
As communicated on 9 April 2020, the annual transparency calculations for the other non-equity instruments have been postponed.
Next steps
The transparency requirements based on the results of the annual calculations of the large in scale (LIS) and size specific to the instruments (SSTI) thresholds for bonds shall apply from 1 June 2020 until 31 May 2021. From 1 June 2021, the results of the next annual calculations of the LIS and SSTI thresholds for bonds, to be published by 30 April 2021, will become applicable.
Systematic internaliser calculations for equity, equity-like instruments and bonds
ESMA has published data for the systematic internaliser calculations for equity, equity-like instruments and bonds under the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR).
ESMA has published the total number of trades and total volume over the period October 2019-March 2020 for the purpose of the systematic internaliser (SI) calculations for 24,940 equity and equity-like instruments and for 316,894 bonds.
The results are published only for instruments for which trading venues submitted data for at least 95% of all trading days over the 6-month observation period. The data publications also incorporate OTC trading to the extent it has been reported to ESMA. The publication includes data also for instruments which are no longer available for trading on EU trading venues at the end of December.
The publication of the data for the SI calculations for derivatives and other instruments has been delayed until August 2020, as announced on 9 April. The SI-assessment for those asset classes does not need to be performed until September 2020.
New bond liquidity data available
ESMA has started today to make available the latest quarterly liquidity assessment for bonds available for trading on EU trading venues. For this period, there are currently 745 liquid bonds subject to MiFID II transparency requirements.
ESMA’s liquidity assessment for bonds is based on a quarterly assessment of quantitative liquidity criteria, which include the daily average trading activity (trades and notional amount) and percentage of days traded per quarter. ESMA updates the bond market liquidity assessments quarterly. However, additional data and corrections submitted to ESMA may result in further updates within each quarter, published in ESMA’s Financial Instruments Transparency System (FITRS), which shall be applicable the day following publication. 
The scope of assessed bonds decreased for this publication as a result of a change in reporting practice from a trading venue in the United Kingdom. This change does not affect the quality of the calculations on the bonds that are published
The full list of assessed bonds will be available through FITRS in the XML files with publication date from 30 April 2020 (link available here) and through the Register web interface (link available here).
As communicated on 27 September 2018, ESMA is also publishing two completeness indicators related to bond liquidity data.
Next steps
The transparency requirements for bonds deemed liquid today will apply from 16 May 2020 to 15 August 2020
Compliments of European Securities and Markets Authority.