Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to Italy 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, Italy, 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) 466 final 2020/0219 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Council Regulation (EU) 2020/672 to Italy 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. 

On 7 August 2020, Italy requested Union financial assistance under the SURE Regulation. In 
accordance  with  Article  6(2)  of  the  SURE  Regulation,  the  Commission  has  consulted  the 
Italian authorities to verify the sudden and severe increase in actual and planned expenditure 
directly related to short-time work schemes and similar measures and health related measures, 
caused by the COVID-19 pandemic. In particular, it concerns:  

(1) 

(2) 

(3) 

(4) 

an extension of existing short-time work schemes (‘Cassa  integrazione guadagni’). 
The measure covers 80 % of the usual salary of the employees, whose employment 
contract  is  maintained,  of  the  companies  completely  or  partially  closed  due  to 
COVID-19, for a maximum of 18 weeks in the period from 23 February 2020 to 31 
October 2020. 

an allowance of EUR 600 for the months of March and April 2020 for self-employed 
persons and freelancers. Freelancers who experienced a reduction of at least 33 % of 
their earnings in March and April 2020 on a year-to-year basis are also entitled to a 
EUR  1000  allowance  for  May  2020.  A  further  allowance  of  EUR  600  for  March 
2020  is  granted  to  self-employed  workers  and  freelancers  registered  with  private 
mandatory social security institutions .   

a  variety  of  measures  targeting  specific  professions  that  have  been  adversely 
impacted by the COVID-19 outbreak. This includes an allowance of EUR 600 for the 
month of March 2020 and of EUR 500 for the month of April 2020 for fixed-term 
employees in agriculture; an allowance of EUR 600 for the months of March, April 
and May 2020 for workers in the entertainment industry (with annual income up to 
EUR  50  000);  an  allowance  of  EUR  600  for  the  months  of  March,  April  and  May 
2020  for  collaborators  of  sports  associations;  an  allowance  of  EUR  600  for  the 
months of March, April and May 2020 for on-call workers and an allowance of EUR 
500 for the months of April and May 2020 for domestic workers. 

two  measures  addressing  the  impact  of  early-childhood  education  services  and 
schools closure in the form of parental leave benefits for up to 30 days in the period 
from 5 March 2020 to 31 August 2020 for employees or self-employed persons with 
children  up  to  12  years  old  (or  above  12,  where  the  child  is  disabled  and  still 
attending  school)  covering  50  %  of  their  income,  and  baby-sitting  vouchers  for  a 
maximum of EUR 2 000 as an alternative to parental leave benefits and valid for the 
same period.  

(5) 

additional disability leave benefits for up to 12 days in the period from 1 March 2020 
to 30 April 2020 and an additional 12 days in the period from 1 May 2020 to 30 June 

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(6) 

(7) 

2020  for  workers  with  a  severe  disability  or  with  relatives  with  a  severe  disability. 
This is an extension of an existing scheme which entitles employees to three days of 
disability leave per month. 

non-repayable  grants  for  self-employed  workers  and  individual  enterprises.  The 
amount of the grant is calculated taking into account the drop in turnover suffered in 
April  2020  compared  to  April  2019  (from  a  minimum  amount  of  EUR  1  000  to  a 
maximum of 20 % of the drop in turnover). 

two  health-related  measures,  a  new  temporary  tax  credit  of  60  %  of  the  costs  of 
improving the safety of the workplace (up to a maximum of EUR 80 000)  and a new 
temporary tax credit of 60 % of the costs of sanitising small businesses, professional 
offices,  and  non-profit  institutions  and  purchasing  safety  equipment  (up  to  a 
maximum of EUR 60 000).  

Italy 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 Italy under the SURE Regulation in 
support of the above measures.  

• 

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, 
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 

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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.  

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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2020/0219 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

granting temporary support under Council Regulation (EU) 2020/672 to Italy 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) 

(4) 

On 7 August 2020, Italy 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  Italy  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,  Italy was expected  to have a general  government deficit and debt of 
11.1% and 158.9% of gross domestic product (GDP) respectively by the end of 2020. 
According  to  the  Commission’s  2020  Summer  interim  forecast,  Italy’s  GDP  is 
projected to decrease by 11.2% in 2020.  

in 

in  agriculture,  workers 

The  COVID-19  outbreak  has  immobilised  a  substantial  part  of  the  labour  force  in 
Italy.  This  has  led  to  a  sudden  and  severe  increase  in  public  expenditure  by  Italy  in 
respect of short-time work schemes for employees, allowances for the self-employed, 
fixed-term  employees 
industry, 
collaborators of sport associations, domestic workers and on-call workers, baby-sitting 
vouchers,  additional  parental  and  disability  leave  benefits,  non-repayable  grants  to 
self-employed workers and individual enterprises, and tax credits in support of public 
health measures, as set out in recitals 4 to 10. 
“Decree-law  n.  18/2020”2  and  “Decree-law  n.  34/2020”3,  as  they  are  referred  to  in 
Italy’s request of 7 August 2020, has been the basis for the introduction of a number of 
measures to address the impact of the COVID-19 outbreak, including an extension of 
existing  short-time  work  schemes  (‘Cassa  integrazione  guadagni’).  The  measure 
covers  80  %  of  the  usual  salary  of  the  employees,  whose  employment  contract  is 

the  entertainment 

OJ L 159, 20.5.2020, p.1. 

1 
2  Decree-law n. 18/2020 as converted by Law n. 27/2020 
3 

Decree-law n. 34/2020 as converted by Law n. 77/2020 

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(5) 

(6) 

(7) 

(8) 

(9) 

maintained, of the companies completely or partially closed due to COVID-19, for a 
maximum of 18 weeks in the period from 23 February 2020 to 31 October 2020. 

For  self-employed  persons  and  freelancers,  the  authorities  have  introduced  an 
allowance  of  EUR  600  for  the  months  of  March  and  April  2020.  Freelancers  who 
experienced a reduction of at least 33 % of their earnings in March and April 2020 on 
a  year-to-year  basis  are  also  entitled  to  a  EUR  1000  allowance  for  May  2020.  A 
further  allowance  of  EUR  600  for  March  2020  is  granted  to  self-employed  workers 
and freelancers registered with private mandatory social security institutions.   

The  authorities  have  introduced  a  variety  of  measures  targeting  specific  professions 
that  have  been  adversely  impacted  by  the  COVID-19  outbreak.  This  includes  an 
allowance of EUR 600 for the month of March 2020 and of EUR 500 for the month of 
April 2020 for fixed-term employees in agriculture; an allowance of EUR 600 for the 
months of March, April and May 2020 for workers in the entertainment industry (with 
annual  income  up  to  EUR  50  000);  an  allowance  of  EUR  600  for  the  months  of 
March, April and May 2020 for collaborators of sports associations; an allowance of 
EUR 600 for the months of March, April and May 2020 for on-call workers and, , an 
allowance of EUR 500 for the months of April and May 2020 for domestic workers. 

Two  measures  addressing  the  impact  of  early-childhood  education  services  and 
schools closure have also been introduced by the authorities, in the  form  of parental 
leave benefits for up to 30 days in the period from 5 March 2020 to 31 August 2020 
for employees or self-employed persons with children up to 12 years old (or above 12, 
where the child is disabled and still attending school) covering 50 % of their income, 
and baby-sitting vouchers for a maximum of EUR 2 000 as an alternative to parental 
leave  benefits  and  valid  for  the  same  period.  These  measures  can  be  considered  as 
similar  measures  to  short-time  work  schemes,  as  referred  to  in  Regulation  (EU) 
2020/672, as they provide income support to employees and the self-employed, which 
will  help  to  cover  the  costs  of  childcare  during  school  closures  and  therefore  help 
parents to continue working, preventing putting the employment relation at risk.  

Furthermore, the authorities have introduced additional disability leave benefits for up 
to 12 days in the period from 1 March 2020 to 30 April 2020 and an additional 12 days 
in the period from 1 May 2020 to 30 June 2020 for workers with a severe disability or 
with  relatives  with  a  severe  disability.  This  is  an  extension  of  an  existing  scheme 
which entitles employees to three days of disability leave per month. 

Non-repayable grants for self-employed workers and individual enterprises have been 
introduced.  The  amount  of  the  grant  is  calculated  taking  into  account  the  drop  in 
turnover suffered in April 2020 compared to April 2019 (from a minimum amount of 
EUR 1 000 to a maximum of 20 % of the drop in turnover).  

(10)  Finally,  two  health-related  measures  have  been  introduced  by  the  authorities,  a  new 
temporary tax credit of 60 % of the costs of improving the safety of the workplace (up 
to a maximum of EUR 80 000) and a new temporary tax credit of 60 % of the costs of 
sanitising  small  businesses,  professional  offices,  and  non-profit  institutions  and 
purchasing safety equipment (up to a maximum of EUR 60 000). Since the tax credits 
consist  of forgone revenue for the  government,  they  can be  considered equivalent  to 
public expenditure. 

(11) 

Italy  fulfils  the  conditions  for  requesting  financial  assistance  set  out  in  Article  3  of 
Regulation  (EU)  2020/672.  Italy  has  provided  the  Commission  with  appropriate 
evidence that the actual and planned public expenditure has increased by EUR 28 811 

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965 628 as of 1 February 2020 due to the increased amounts directly related to short-
time  work  schemes  for  employees,  allowances  for  the  self-employed,  fixed-term 
employees in agriculture, workers in the entertainment industry, collaborators of sport 
associations, domestic workers and on-call workers, baby-sitting vouchers, additional 
parental  and  disability  leave  benefits,  and  non-repayable  grants  to  self-employed 
workers  and  individual  enterprises.  This  constitutes  a  sudden  and  severe  increase 
because  it  relates  to  both  new  and  an  extension of  existing  measures,  which  cover  a 
significant proportion of undertakings and of the labour force in Italy. Italy intends to 
finance  EUR  320  000  000  of  the  increased  amount  of  expenditure  through  Union 
funds. 

(12)  The Commission has consulted Italy and verified the sudden and severe increase in the 
actual and planned public expenditure directly related to short-time work schemes and 
similar measures, as well as the recourse to relevant health-related measures related to 
the  COVID-19  outbreak  referred  to  in  the  request  of  7  August  2020,  in  accordance 
with Article 6 of Regulation (EU) 2020/672.  

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

(14)  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. 

(15) 

Italy  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 Italy has implemented that expenditure. 

(16)  The  decision  to  provide  financial  assistance  has  been  taken  taking  into  account 
existing  and  expected  needs  of  Italy,  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.  In  particular,  the  amount  of  the  loan  has  been 
established to  ensure compliance with  the prudential  rules  applicable to the portfolio 
of loans as specified in Council Regulation (EU) 2020/672, 

HAS ADOPTED THIS DECISION:  

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

Article 1 

Article 2 

1. 

2. 

3. 

The Union shall make available to Italy a loan amounting to a maximum of EUR 27 
438 486 464. The loan shall have a maximum average maturity of 15 years. 

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 Italy in 
a  maximum  of  ten  instalments.  An  instalment  may  be  disbursed  in  one  or  several 
tranches. The maturities of the tranches under the first instalment may be longer than 

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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.  

Italy 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.  

4. 

5. 

6. 

Italy may finance the following measures: 

Article 3  

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

the extension of existing short-time work schemes (‘Cassa integrazione guadagni’) 
for  employees,  as  provided  for  by  Articles  19-22  of  Decree-law  n.  18/2020  as 
converted  by  Law  n.  27/2020  and  Articles  68-71  of  Decree-law  n.  34/2020    as 
converted by Law n. 77/2020;  

an  allowance  for  the  self-employed,  as  provided  for  by  Articles  27,  28  and  44  of 
Decree-law n. 18/2020 as converted by Law n. 27/2020 and Article 84 of Decree-law  
n. 34/2020 as converted by Law n. 77/2020;  

allowances for fixed-term employees in agriculture, as provided for by Article 30 of 
Decree-law n. 18/2020 and Article 84 of Decree-law n 34/2020 as converted by Law 
n. 77/2020;  

allowances for workers in the entertainment industry, as provided for by Article 38 
of Decree-law n. 18/2020 and Article 84 of Decree-law n 34/2020  as converted by 
Law n. 77/2020;  

allowances  for  collaborators  of  sport  associations,  as  provided  for  by  Article  96  of 
Decree-law n. 18/2020 and Article 84 of Decree-law n 34/2020 as converted by Law 
n. 77/2020;  

an allowance for domestic workers, as provided  for by Article 85 of Decree-law n. 
34/2020 as converted by Law n. 77/2020;  

an  allowance  for  on-call  workers,  as  provided  for  by  Articles  44  of  Decree-law  n. 
18/2020 and Article 84 of Decree-law n. 34/2020 as converted by Law n. 77/2020;  

non-repayable  grants  to  self-employed  workers  and  individual  enterprises,  as 
provided  for  by  Article  25  of  Decree-law  n.  34/2020  as  converted  by  Law  n. 
77/2020, for the part of expenditure related to the support of the self-employed and 
one-person companies;  

parental  leave  benefits,  as  provided  for  by  Articles  23  and  25  of  Decree-law  n. 
18/2020 as converted by Law n. 27/2020 and Article 72 of Decree-law n. 34/2020 as 
converted by Law n. 77/2020;  

baby-sitting  vouchers,  as  provided  for  by  Articles  23  and  25  of  Decree-law  n. 
18/2020 as converted by Law n. 27/2020 and Article 73 of Decree-law n. 34/2020 as 
converted by Law n. 77/2020;  

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(k) 

(l) 

(m) 

disability leave benefits, as provided for by Articles 24 of Decree-law n. 18/2020 as 
converted by Law n. 27/2020 and Article 74 of Decree-law n. 34/2020 as converted 
by Law n. 77/2020; 

tax credits in respect of improvements to the  safety of the workplace, as provided for 
by Article 120 of Decree-law n. 34/2020 as converted by Law n. 77/2020;  

tax credits in respect of sanitisation of workplaces and purchase of safety equipment, 
as  provided  for  by  Article  125  of  Decree-law  n.  34/2020  as  converted  by  Law  n. 
77/2020. 

Italy  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 Italian 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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