Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to Slovakia to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak
Date: 2020-08-24
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU loan, Slovakia, emergency aid, employment aid, epidemic, fight against unemployment, infectious disease, public expenditure, self-employed person

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   EUROPEAN COMMISSION  Brussels, 24.8.2020  COM(2020) 462 final 2020/0215 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to Slovakia to mitigate unemployment risks in an emergency situation following the COVID-19 outbreak  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Council  Regulation  2020/672  (“SURE  Regulation”)  lays  down  the  legal  framework  for 
providing  Union  financial  assistance  to  Member  States,  which  are  experiencing,  or  are 
seriously threatened with, a severe economic disturbance caused by the COVID-19 outbreak. 
Support  under  SURE  serves  for  the  financing,  primarily,  of  short-time  work  schemes  or 
similar measures aimed at protecting employees and the self‐ employed and thus reducing the 
incidence of unemployment and loss of income, as well as for the financing, as an ancillary, 
of some health-related measures, in particular in the workplace. 

the 

thus  reducing 

the  self‐ employed  and 

On  6  August  2020,  Slovakia  requested  Union  financial  assistance  under  the  SURE 
Regulation.  In  accordance  with  Article  6(2)  of  the  SURE  Regulation,  the  Commission  has 
consulted  the  Slovakian  authorities  to  verify  the  sudden  and  severe  increase  in  actual  and 
planned  expenditure  directly  related  to  the  national  short-time  work  scheme  and  similar 
measures caused by the COVID-19 pandemic. The national short-time work scheme aims at 
protecting  employees  and 
incidence  of 
unemployment and loss of income. It allows businesses experiencing economic difficulties to 
temporarily  reduce  the  hours  worked  by  their  employees,  who  are  provided  with  public 
income  support  for  the  hours  not  worked.  The  scheme  can  be  accessed  by  employers  who 
have temporarily furloughed some of their employees from March 2020 to December 2021. 
Such employers can request a reimbursement of wage costs of up to 80% of the usual gross 
salary of the employee furloughed up to a maximum of EUR 880 per month, conditional on 
employee  retention.  In  addition  to  the  national  short-time  work  scheme,  Slovakia  also 
introduced  the  following  accompanying  measures  (a)  a  flat-rate  contribution  per  employee 
from March to the end of September 2020 contingent on a decrease in sales of at least 20% 
(monthly support from EUR 180 to EUR 540 depending on the sales decrease); (b) a flat-rate 
contribution  until  the  end  of  September  2020  payable  to  self-employed  persons  with 
compulsory  social  insurance  contingent  on  a  decrease  in  sales  of  at  least  20%  (monthly 
support from EUR 180 to EUR 540 depending on the sales decrease); (c) a reimbursement of 
80%  of  the  employee’s  gross  salary  (up  to  a  maximum  of  EUR 1  100)  until  the  end  of 
September  2020  for  enterprises  closed  by  decree;  and  (d)  a flat-rate  allowance  of  EUR 210 
per  month  until  the  end  of  September  2020  for  workers  working  under  a  contract,  single-
person companies and the self-employed.  

Slovakia provided the Commission with the relevant information.  

Taking into account the available evidence, the Commission proposes to the Council to adopt 
an  Implementing  Decision  to  grant  financial  assistance  to  Slovakia  under  the  SURE 
Regulation in support of the measures above. 

• 

Consistency with existing policy provisions in the policy area 

The present proposal is fully consistent with  Council Regulation 2020/672, under which the 
proposal is made. 

The present proposal comes in addition to another Union law instrument to provide support to 
Member States in case of emergencies, namely Council Regulation (EC) No 2012/2002 of 11 
November 2002 establishing the European Union Solidarity Fund (EUSF) (“Regulation (EC) 
No 2012/2002”). Regulation (EU) 2020/461 of the European Parliament and of the Council, 

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which amends that instrument to  extend its scope to  cover major public  health emergencies 
and to define specific operations eligible for financing, was adopted on 30 March.   

• 

Consistency with other Union policies 

The proposal is part of a range of measures developed in response to the current COVID-19 
pandemic  such  as  the  “Coronavirus  Response  Investment  Initiative”,  and  it  complements 
other  instruments  that  support  employment  such  as  the  European  Social  Fund  and  the 
European Fund for Strategic Investments (EFSI)/InvestEU. By making use of borrowing and 
lending in this particular case of the COVID-19 outbreak for supporting Member States, this 
proposal  acts  as  a  second  line  of  defence  to  finance  short-time  work  schemes  and  similar 
measures,  helping  protect  jobs  and  thus  employees  and  self-employed  against  the  risk  of 
unemployment.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The legal basis for this instrument is Council Regulation 2020/672.   

• 

Subsidiarity (for non-exclusive competence)  

The  proposal  follows  a  Member  State  request  and  shows  European  solidarity  by  providing 
Union financial assistance in the form of temporary loans to a Member State affected by the 
COVID-19  outbreak.  As  a  second  line  of  defence,  such  financial  assistance  supports  the 
government’s increased public expenditure on a temporary basis in respect of short-time work 
schemes  and  similar  measures  to  help  them  protect  jobs  and  thus  employees  and  self-
employed against the risk of unemployment and loss of income. 

Such  support  will  help  the  population  affected  and  helps  to  mitigate  the  direct  societal  and 
economic impact caused by the present COVID-19 crisis.  

• 

Proportionality 

The proposal respects the proportionality principle. It does not go beyond what is necessary to 
achieve the objectives sought by the instrument.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

Due to the urgency to prepare the proposal so that it can be adopted in a timely manner by the 
Council, a stakeholder consultation could not be carried out. 

• 

Impact assessment 

Due to the urgent nature of the proposal, no impact assessment was carried out. 

4. 

BUDGETARY IMPLICATIONS 

The  Commission  should  be  able  to  contract  borrowings  on  the  financial  markets  with  the 
purpose  of  on-lending  them  to  the  Member  State  requesting  financial  assistance  under  the 
SURE instrument.  

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In  addition  to  the  provision  of  Member  State  guarantees,  other  safeguards  are  built  into  the 
framework in order to ensure the financial solidity of the scheme: 

 

 

A rigorous and conservative approach to financial management; 

A  construction  of  the  portfolio  of  loans  that  limits  concentration  risk,  annual 
exposure and excessive exposure to individual Member States whilst ensuring 
sufficient resources could be granted to Member States most in need; and 

 

Possibilities to roll over debt. 

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2020/0215 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

granting temporary support under Council Regulation (EU) 2020/672 to Slovakia to 
mitigate unemployment risks in an emergency situation following the COVID-19 
outbreak 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union, 

Having regard to Council Regulation (EU) 2020/672 of 19 May 2020 on the establishment of 
a  European  instrument  for  temporary  support  to  mitigate  unemployment  risks  in  an 
emergency (SURE) following the COVID-19 outbreak1, and in particular Article 6(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

On 6 August 2020, Slovakia requested financial assistance from the Union with a view 
to complementing its national efforts to address the impact of the COVID-19 outbreak 
and its socio-economic consequences for workers.  

The COVID-19 outbreak and the extraordinary measures implemented by Slovakia to 
contain the outbreak and its socio-economic and health-related impact are expected to 
have  a  dramatic  impact  on  public  finances.  According  to  the  Commission’s  2020 
Spring forecast, Slovakia was expected to have a general government deficit and debt 
of 8.5% and 59.5% of gross domestic product (GDP) respectively by the end of 2020. 
According  to  the  Commission’s  2020  Summer  interim  forecast,  Slovakia’s  GDP  is 
projected to decrease by 9.0% in 2020.  

The  COVID-19  outbreak  has  immobilised  a  substantial  part  of  the  labour  force  in 
Slovakia.  This  has  led  to  a  sudden  and  severe  increase  in  public  expenditure  by 
Slovakia  in  respect  of  the  national  short-time  work  scheme  and  similar  measures,  as 
set out in recital 4.  

(4)  More specifically, “Act No. 5/2004 Coll. on Employment Services”, as it is referred to 
in  Slovakia’s  request  of  6  August  2020,  has  been  the  basis  for  the  introduction  of  a 
number  of  measures  to  address  the  impact  of  the  COVID-19  outbreak,  including  a 
scheme to support employers who temporarily furloughed employees between March 
2020 to December 2021. Such employers can request a reimbursement of wage costs 
of up to 80% of the usual gross salary of the employee furloughed up to a maximum of 
EUR 880  per  month,  conditional  on  employee  retention.  In  addition,  a  number  of 
accompanying  measures  were  introduced:  (a)  a  flat-rate  contribution  per  employee 
from March to the end of September 2020 contingent on a decrease in sales of at least 
20% (monthly support from EUR 180 to EUR 540 depending on the sales decrease); 
(b) a flat-rate contribution until the end of September 2020 payable to self-employed 
persons with compulsory social insurance contingent on a decrease in sales of at least 

1 

OJ L 159, 20.5.2020, p.1. 

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20% (monthly support from EUR 180 to EUR 540 depending on the sales decrease); 
(c)  a  reimbursement  of  80%  of  the  employee’s  gross  salary  (up  to  a  maximum  of 
EUR 1 100) until the end of September 2020 for enterprises closed by decree; and (d) 
a flat-rate  allowance  of  EUR 210  per  month  until  the  end  of  September  2020  for 
workers  working  under  a  contract,  single-person  companies  and  the  self-employed. 
The  flat-rate  allowance  can  be  considered  a  similar  measure  to  short-time  work 
schemes, as referred to in Regulation (EU) 2020/672, as it aims at protecting the self-
employed or similar categories of workers from reduction or loss of income. 

Slovakia fulfils the conditions for requesting financial assistance set out in Article 3 of 
Regulation  (EU)  2020/672.  Slovakia  has  provided  the  Commission  with  appropriate 
evidence that the actual and planned public expenditure has increased by EUR 1 077 
457 000 as of 1 February 2020 due to the national measures taken to address the socio-
economic  effects  of  the  COVID-19  outbreak.  This  constitutes  a  sudden  and  severe 
increase because the new measures cover a significant proportion of undertakings and 
of the labour force in Slovakia. Slovakia intends to finance EUR 390 262 000 of the 
increased amount of expenditure through Union funds and EUR 56 311 400 through 
its own financing. 

The Commission has consulted Slovakia and verified the sudden and severe increase 
in  the  actual  and  planned  public  expenditure  directly  related  to  short-time  work 
schemes  and  similar  measures  referred  to  in  the  request  of  6  August  2020,  in 
accordance with Article 6 of Regulation (EU) 2020/672. 

Financial assistance should therefore be provided with a view to helping Slovakia to 
address the socio-economic effects of the severe economic disturbance caused by the 
COVID-19 outbreak. 

This decision should be without prejudice to the outcome of any procedures relating to 
distortions of the operation of the internal market that may be undertaken, in particular 
under Articles 107  and  108 TFEU.  It  does not  override the  requirement  for Member 
States to notify instances of potential State aid to the Commission under Article 108 
TFEU. 

Slovakia should inform  the Commission  on a regular basis of the implementation  of 
the planned public expenditure, in order to enable the Commission to assess the extent 
to which Slovakia has implemented that expenditure. 

(5) 

(6) 

(7) 

(8) 

(9) 

(10)  The  decision  to  provide  financial  assistance  has  been  taken  taking  into  account 
existing  and  expected  needs  of  Slovakia,  as  well  as  requests  for  financial  assistance 
pursuant  to  Regulation  (EU)  2020/672  already  submitted  or  planned  to be  submitted 
by other Member States, while applying the principles of equal  treatment,  solidarity, 
proportionality and transparency, 

HAS ADOPTED THIS DECISION: 

Slovakia fulfils the conditions set out in Article 3 of Regulation (EU) 2020/672. 

Article 1 

1. 

The Union shall make available to Slovakia a loan amounting to a maximum of EUR 
630 883 600. The loan shall have a maximum average maturity of 15 years. 

Article 2 

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2. 

3. 

4. 

5. 

6. 

The availability period for financial assistance  granted by this Decision shall be 18 
months starting from the first day after the entry into force of this Decision. 

The  Union  financial  assistance  shall  be  made  available  by  the  Commission  to 
Slovakia in a maximum of eight instalments. An instalment may be disbursed in one 
or several tranches. The maturities of the tranches under the first instalment may be 
longer than the maximum average maturity referred to in paragraph 1. In such cases, 
the maturities of further tranches shall be set so that the maximum average maturity 
referred to in paragraph 1 is respected once all instalments have been disbursed. 

The  first  instalment  shall  be  released  subject  to  the  entry  into  force  of  the  loan 
agreement provided for in Article 8(2) of Regulation (EU) 2020/672. 

Slovakia  shall  pay  the  cost  of  funding  of  the  Union  referred  to  in  Article  4  of 
Regulation (EU) 2020/672 for each instalment plus any fees, costs and expenses of 
the Union resulting from any funding. 

The Commission shall decide on the size and release of instalments, as well as on the 
size of the tranches. 

Slovakia  may  finance  the  national  short-time  work  scheme  and  accompanying  measures  as 
provided for by Article 54(1)(e) of Act No. 5/2004 Coll. on Employment Services. 

Article 3  

Slovakia shall inform the Commission by [DATE: 6 months after date of publication of this 
Decision],  and  every  6  months  thereafter  of  the  implementation  of  the  planned  public 
expenditure until such time as that planned public expenditure has been fully implemented. 

Article 4 

This Decision is addressed to the Slovak Republic. 

Article 5 

This Decision shall be published in the Official Journal of the European Union. 

Done at Brussels, 

Article 6 

For the Council 
The President 

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