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To address the crisis and the develop a proper strategy for recovery, IMPALA published a set of recommendations in its Crisis Plan and Recovery Roadmap, respectively adopted in March and May. Below are the recommendations for the EU, and the EU's responses.
Increased EU loan guarantees for cultural sectors - the capacity of the EU's Cultural and Creative Sectors Guarantee Facility should be tripled, with 100% guarantees to promote national lending (current guarantee level is 75%).
EU crisis measures for culture - with culture being in the first and hardest hit sectors, a specific crisis fund is needed specifically for smaller actors to provide non-refundable financial support and interest free loans, along with other measures such as allowing countries to lift VAT on cultural goods and services and providing incentives for new growth in the sector post crisis.
Monitor national action and integrate culture in general EU decisions - the EU should monitor effectiveness of national responses, general EU funds released to address the crisis should be accessible for culture, all EU projects that depend on events should be automatically carried over, and delays in reporting and project management should be accommodated.
Alongside this crisis plan, IMPALA released on 29th April 2020 a proposed ten-step roadmap with a timeline seeking decisions in May through to September and beyond. The roadmap sets out financial and non-financial tools to increase liquidity in the music and broader cultural industries:
Step 1 – Recognising music and culture as priority sectors (May 2020)
Step 2 – Co-ordinating de-confinement and mobility strategies across Europe (now onwards)
Step 3 – Allocating sector specific EU and national crisis funds (May 2020)
Step 4 – Adopting 5-year state aid framework (May 2020)
Step 5 – Increasing allocation for culture in future EU budget (May 2020)
Step 6 – Boosting loans for small and medium businesses (May 2020)
Step 7 – Granting VAT holidays and longer-term measures (when retail stores re-open):
Step 8 – Adopting national tax credit schemes (by September 2020)
Step 9 – Implementing EU copyright directive by the summer (July 2020, September latest)
Step 10 – Reviewing tools to value music and culture properly (September 2020 to January 2021)
-The EU has formed a task force made up of 9 commissioners, chaired by Commissioner Janez Lenarčič in his role as European Emergency Response Coordinator, to support Member States to address the crisis by providing recommendations, ensuring coordination, and preventing the enactment of contradictory measures.
-On 9 April, the Eurogroup (EU member states who share the Euro as currency) adopted a €500bn support package. Finance ministers took stock of actions taken this far (listed further below), and outlined a coordinated economic response (see here) – Among other things:
As of 9 April, member States’ discretionary fiscal measures amounted to 3% of EU GDP, and liquidity support consisting of public guarantee schemes and deferred tax payments, were estimated at 16% of EU GDP.
The Eurogroup welcomed the initiative of the European Investment Bank (EIB) to create a pan-European guarantee fund of €25bn, which could support €200bn of financing for companies with a focus on SMEs.
Work will start on a Recovery Fund to prepare and support the recovery, providing funding through the EU budget to programmes designed to kick-start the economy in line with European priorities and ensuring EU solidarity with the most affected member states.
The next EU Multiannual Financial Framework (MFF), the EU’s 2021-2027 budget, will be adapted to help member states to effectively address the fallout of the coronavirus crisis and support the economic recovery.
Work is ongoing on a broader roadmap and an action plan to support the recovery of the European economy through high quality job creation and reforms.
-As part of the Coronavirus Response Investment Initiative, which came into force on 1st April, the EU is redirecting €37bn from the EU budget resources (particularly from EU structural and investment funds) to member states, with some going to support SMEs and short-term employment schemes. The music sector is advised to try and make sure their respective governments prioritise culture and music in how they allocated these funds as much of it will be allocated at national level.
-The scope of the Solidarity Fund was broadened to include major public health crises. Starting from the 1st of April, this allows the hardest hit Member States to get access to financial support of up to EUR 800 million in 2020. The Solidarity Fund is also open to accession countries (Serbia, Montenegro, North Macedonia, Albania and Turkey).
-This is on top of other measures, for example via the European Investment fund where EUR 1 billion is being made available as a guarantee to help generate €8bn of working capital for around 100,000 small and medium sized businesses and small mid-caps. It is intended to boost existing financial instruments to encourage national banks to offer bridging finance to SMEs under general EU schemes such as COSME (for small companies), Horizon 2020 and the EU’s fund for Strategic Investment.
-On 18 March, the European Central Bank launched a €750bn Pandemic Emergency Purchase Programme to support liquidity and financing conditions to households, businesses and banks.
-On 2 April, the European Commission proposed SURE, a new instrument for temporary support to mitigate unemployment risks in an emergency, which is designed to help protect jobs and workers affected by the coronavirus pandemic. It will provide financial assistance in the form of loans granted on favourable terms from the EU to member states, of up to €100bn in total. More information here.
-Credit holidays allowing for delayed repayments of loans are being implemented for affected companies under the same EU instruments.
-The European Globalisation Adjustment Fund, which provides support for workers made redundant by a single company with over 500 employees, could be also mobilised to support dismissed workers and the self-employed under the conditions of the current and future Regulation. Up to €179 million is available in 2020.
-A Temporary Framework for State aid measures is in place until December 2020 (with possible extension) to offer more flexibility for member states to support their economy. The cultural sector is covered, alongside tourism and transport. This means member states have the freedom they need to come up with their own crisis plans including subsidising wages, suspending social security contributions, VAT payments etc.
-The Commission also proposed to activate the general escape clause of the Stability and Growth Pact which will allow Member States to pursue a fiscal policy that facilitates the implementation of all measures necessary to deal with the crisis like targeted relief measures for firms and workers.
-As part of its response to the coronavirus outbreak, the European Commission has announced the reallocation of €374 million to help the socio-economic recovery of the Western Balkans. The EU will also redirect funds from the Instrument for Pre-Accession Assistance to help the recovery in the region. The Commission is also working closely with relevant international and EU financing institutions to provide a coordinated response to support the economy, including SMEs, and support liquidity, also of the banking sector. (More here).
- On 15th May, the European Parliament approved €3 billion in loans to help EU neighbours and partner countries deal with the fallout of COVID-19. The loans, which will be given on highly favourable terms and disbursed over a year, will help the following ten countries whose economies have been pushed into recession by the pandemic: the Republic of Albania (€180 million), Bosnia and Herzegovina (€250 million), Georgia (€150 million), the Hashemite Kingdom of Jordan (€200 million), Kosovo (€100 million), the Republic of Moldova (€100 million), Montenegro (€60 million), the Republic of North Macedonia (€160 million), the Republic of Tunisia (€600 million) and Ukraine (€1.2 billion).
-On 27th May, the European Commission presented its recovery plan, proposing to create a new recovery instrument called Next Generation EU worth €750bn of money borrowed on the financial markets. The instrument, which will be embedded in a new 2021-2027 EU budget, introduces new facilities and programmes and also increases the budget of a number of existing programmes. (see here)
- On 29th July, the European Commission and European Investment Fund announce new coronavirus measures for businesses under the €251 million Cultural and Creative Sectors Guarantee Facility (see here). This revision will provide more flexibility for the cultural and creative sectors, to alleviate the economic constraints caused by the coronavirus crisis.
EU measures for culture
-On 8 April, EU ministers of culture and Commissioner for Culture Mariya Gabriel met to discuss the impact of the COVID-19 pandemic on the culture and creative sectors. (see here).
The Ministry of Culture of Croatia, Nina Obuljen Koržinek, which currently holds the EU presidency, stressed that the cultural and creative sectors were among the first, if not the first, hit by the current crisis, and that there were serious concerns over how parts of the sector would recover after the crisis.Most member states had implemented social measures which could help cultural workers, and had also extended deadlines for funding calls, and a number of countries had allocated sums/funds for different parts of the sector. Member states welcomed the European commission’s initiatives taken so far, and agreed to contine working together ahead of a Ministerial meeting on this subject due to take place in May, with a particular focus on joint action to be taken for recovery in the post-crisis period.
Commissioner Gabriel also highlighted the massive impact of the current crisis on the cultural sector in terms of income and jobs lost. She mentioned that 95% of the sector was made up of SMEs and independents, and that organisations were calling for coordinated action and financial support. Commissioner Gabriel listed the general measures taken at EU level that could benefit the sector (listed above under « EU general measures » : Coronavirus investment response initiative, SURE programme to mitigate unemployment risks, temporary framework for state aid), and announced some sector specific actions under Creative Europe, the EU’s culture programme :
Maximum flexibility within existing rules for ongoing actions, and extended deadlines. (The Commission since published a Q&A for its Creative Europe programme, see here).
Clear instructions to creative europe desks in how to apply « force majeure ».
Special action for cinemas : €5M supplementary allocation of funds in the form of vouchers for most affected cinemas.
Redirecting support scheme for cross-border dimension of performing arts works towards digital culture and virtual mobility. A call of €2m will be announced in May.
Speeding up call for translation of books.
Speeding up evaluation of 2020 cooperation projects.
Exploring how to adapt the Cultural and Creative Sector guarantee facility (EU loan guarantee instrument) to mitigate the effect of the crisis.
Commissioner Gabriel also announced that two platforms would be set up : one for member states to exchange about measures to put in place to support the sector, and one for the sector to come up with its own proposals and solutions.
-On 4 May, Commissioners Thierry Breton (Internal Market) and Mariya Gabriel (Culture) were invited to exchange with the European Parliament's Culture committee. In his speech (available here), Breton announced that culture would be one of the 14 sectors covered by the EU's recovery plan, and that the commission was working with the EU Investment Fund to adapt the Cultural and Creative Sectors Guarantee Facility (loan guarantee instrument) to make it more attractive and useful.
-On 19 May, EU Ministers of Culture and Commissioner for Culture (but also research, innovation, youth and education) Mariya Gabriel met to continue the discussion on measures to help the cultural and creative sector recover from the crisis.
Ministers exchanged on measures taken and to come to support the sector. The Ministry of Culture of Croatia, Nina Obuljen Koržinek, emphasized the importance of continuing this mapping exercise and of taking a joint and decisive approach. Ministers agreed that the implementation of the copyright directive was needed to align legislation and support cultural diversity and artists.
Commissioner Gabriel updated Ministers on the commission's initiatives since the April meeting:
-A Creative Europe call for performing arts will be launched shortly.
-The 2020 edition of the preparatory action Music Moves Europe (€2,5m) will be reprogrammed to help the music sector.
-The Commission would like to mobilise money available under Erasmus+ (the EU's framework programme for education, training, youth and sport) for cultural projects. Commissioner Gabriel said she hoped to be able to mobilise up to €100m.
-As part of the recovery plan presented by the European Commission on 27th May (see above), cultural and creative industries are rightly identified as one of the 14 ecosystems which are the hardest hit by the crisis, and the sector should in principle be able to benefit from a number of programmes such as Invest-EU (investment fund), React-EU (cohesion policy), Horizon Europe (innovation and research programme), although more clarity and guarantees are needed to ensure the sector can benefit appropriately from the plan’s various instruments. As for Creative Europe, the only programme dedicated to the EU's cultural and creative sectors, the commission is proposing a €1.5bn budget (€1.7bn in 2018 prices), which is slightly higher than the current programme (€1.46bn) but lower than the commission's 2018 proposal (€1.85bn, or €1.6bn in today's prices) and much lower than the European Parliament's proposed €2.8bn.
As per IMPALA's crisis plan, the sector is also pushing for additional funds to be made available to boost Creative Europe, specifically the guarantee facility (we have asked EU to triple the amount available and ensure risk cover is upped to 100% from 75%).
IMPALA is also pushing for an immediate crisis hardship fund for culture to provide relief for members, and for the EU to monitor member state responses.
Together with other music sector organisations (see letter here) we are asking for music to be recognised as a priority sector with specific funds allocated.
Again the message is that member states must prioritise music and culture as hard hit sectors.
The European Parliament is also active. For example, MEP Sabine Verheyen (DE, EPP) - on behalf of the European Parliament’s culture committee which she chairs - was among the first to call for the EU’s Covid crisis money distributed to member states to reach cultural and creative sectors immediately (see here). On 12 May, MEP Verheyen - again on behalf of the Culture committee - called for the budget of the future 2021-2027 Creative Europe programme (the EU's culture programme) to be doubled, and for an overhaul of rules and procedures which often prove cumbersome for smaller players in the sector (see here).
There is also an interesting initiative initiated by Green MEPs and supported by over 100 MEPs across the political spectrum (see full list), and over 300 associations including IMPALA and all its national association members (see full list). The open letter addressed to EU leaders calls for support for the cultural and creative sectors to help them address the current crisis and there is quite a lot of complementarity with what IMPALA is asking in its own crisis plan.
Read the letter available in 5 languages and sign the accompanying petition here - The petition has already been signed by almost 5,500 people.
The petition can be promoted using the hashtag #saveEUculture.
They are also looking for creators to either do interviews about their situation and also for a social campaign under the name #saveEUculture
Reacting to the budget proposed by the European Commission for Creative Europe as part of its recovery plan presented on 27th May, the Chair of the European Parliament's Culture committee Sabine Verheyen and the MEP responsible for the Creative Europe file in the Parliament called on the Commission to "rethink its deeply disappointing proposal" which was "sending a terrible message to the cultural and creative and media sectors". (Read the statement here)