Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Regulation (EU) 2020/672 to Estonia to mitigate unemployment risks in the emergency following the COVID-19 outbreak
Date: 2021-02-26
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU loan, Estonia, aid to undertakings, coronavirus disease, emergency aid, employment aid, epidemic, fight against unemployment, public expenditure

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.2.2021  COM(2021) 104 final 2021/0052 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION granting temporary support under Regulation (EU) 2020/672 to Estonia to mitigate unemployment risks in the emergency following the COVID-19 outbreak  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Council Regulation (EU) 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  4  February  2021,  Estonia  requested  Union  financial  assistance  under  the  SURE 
Regulation.  In  accordance  with  Article  6(2)  of  the  SURE  Regulation,  the  Commission  has 
consulted  the  Estonian  authorities  to  verify  the  sudden  and  severe  increase  in  actual  and 
planned  expenditure  directly  related  to  short-term  labour  market  schemes  and  similar 
measures  and  health  related  measures  caused  by  the  COVID-19  pandemic.  In  particular,  it 
concerns: 

(a)  a  short-term  labour  market  scheme  for  the  preservation  of  jobs.  The  objective  was  to 
support  private  sector  employees  whose  salaries/wages  or  working  hours  had  been 
temporarily  reduced  because  of  the  substantial  impact  of  the  emergency  situation  by 
providing  employees  with  up  to  70%  of  the  employee’s  average  monthly  salary  or  wages, 
capped  to  EUR  1000  per  employee  per  month.  It  concerns    a  temporary  measure  for  the 
period of the emergency situation from March to May 2020. Given the continued impact  of 
the emergency situation on employment, the furlough scheme was prolonged to apply in June 
2020  and  its  conditions  were  adjusted  so  that  the  government  support  to  an  employee  was 
reduced to up to 50% of the employee’s average monthly salary or wages and capped to EUR 
800 per employee. In order to receive the government support for employees, companies had 
to  pay  at  least  EUR  150  (on  gross  basis)  per  employee  per  month,  so  that  each  employee 
received a monthly earnings of at least EUR 584, which is equal to the minimum wage.  

(b)  an  allowance  for  the  preservation  of  earnings  for  parents  who  during  the  emergency 
situation had to suspend work to take care of their children with special educational needs. It 
was a temporary measure for the period of the emergency situation from 12 March to 17 May 
2020.  The  allowance  was  calculated  on  the  basis  of  social  tax  paid  on  a  respective  parent's 
salaries or wages in 2019. The support covered 70% of an average daily salary or wages of 
one parent.  

(c)  a  short-term  labour  scheme  for  freelance  artists,  sports  coaches  and  heads  of  choirs  and 
dance  groups.  It  was  a  temporary  scheme  for  the  period  of  the  emergency  situation  from  1 
March to 31 May 2020. Freelance artists were supported in an amount equal to the minimum 
wage for a period of two months. Heads of choirs and folk dance groups and sports coaches 
were provided with government support that represented 70% of average salary or wages for 
the  period  from  October  2019  to  February  2020,  capped  at  EUR  1000  per  employee  per 
month. Sports coaches were supported in the amount of 50% of their regular salary/wages, the 
other 50% being paid by sports organisation.  

(d)  a  health  related  measure  consisting  of  public  expenditure  on  personal  protective 
equipment and additional general supplies and consumables.   

(e) a short-term support scheme for hospitals to compensate for the costs of hiring temporary 
staff for COVID-19 units and intensive care units, and paying for extended working hours for 

EN 

1 

  EN 

doctors, nurses and other staff. It covered the costs of an additional need for staff in COVID-
19 units and intensive care units in hospitals. The additional staff was hired with higher salary 
(coefficient 2.0) to keep the staff motivated during the emergency situation.  

(f)  a compensation for  employees  for the first  three days of  sick leave  for the period of the 
emergency  situation  from  13  March  to  17  May  2020.  The  increased  use  of  sick  and  care 
leaves  due  to  COVID-19  was  compensated  for  persons  insured  by  the  Estonian  Health 
Insurance Fund for the first three days of sickness (which are normally paid by the employee).  

Estonia 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 Estonia 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 (EU) 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 2020.   

• 

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 (EU) 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.  

EN 

2 

  EN 

• 

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. 

EN 

3 

  EN 

2021/0052 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

granting temporary support under Regulation (EU) 2020/672 to Estonia to mitigate 
unemployment risks in the emergency 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 outbreak 1, and in particular Article 6(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

On  4  February  2021,  Estonia  requested  financial  assistance  from  the  Union  with  a 
view  to  complementing  its  national  efforts  to  address  the  impact  of  the  COVID-19 
outbreak and respond to the socio-economic consequences of the outbreak for workers 
and the self-employed. 

The COVID-19 outbreak and the  extraordinary  measures implemented by  Estonia 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 
Autumn forecast, Estonia was expected to have a general government deficit and debt 
of 5.9% and 17.2% of gross domestic product (GDP) respectively by the end of 2020. 
According  to  the  Commission's  2021  Winter  interim  forecast,  Estonia's  GDP  is 
projected to have decreased by 2.9% in 2020. 

The  COVID-19  outbreak  has  immobilised  a  substantial  part  of  the  labour  force  in 
Estonia. This has led to a sudden and severe increase in public expenditure in Estonia 
in respect of  short-term labour market measures, and similar measures, as well as the 
recourse to relevant health-related measures related to the COVID-19 outbreak, as set 
out in recitals (4) to (9). 

Government  Regulation  no.130  “Tööhõiveprogramm  2017–2020”  of  17  November 
2016, as amended in 20202, as it is referred to in Estonia’s request of 4 February 2021, 
introduced a short-term labour market scheme for the preservation of jobs (in force as 
from  23 March 2020). The objective was to  support private sector employees whose 
salaries  or  working  hours  had  been  temporarily  reduced  because  of  the  substantial 
impact  of  the  emergency  situation  by  providing  employees  with  up  to  70%  of  the 
employee’s average monthly salary or wages, capped to EUR 1000 per employee per 
month.  It  was  a  temporary  scheme  for  the  period  of  the  emergency  situation  from 
March  to  May  2020.  Given  the  continued  impact  of  the  emergency  situation,  the 

1 
2 

OJ L 159, 20.5.2020, p.1. 
Riigi Teataja (henceforth RT) I, 20.03.2020, 3.  

EN 

4 

  EN 

                                                 
regulation was amended again3 and applied for June 2020. Conditions for the furlough 
scheme were adjusted so that the government support to an employee was reduced to 
up to 50% of the employee’s average monthly salary or wages and capped to EUR 800 
per employee.  In order to receive the  government  support for employees,  companies 
had  to  pay  at  least  EUR  150  (on  gross  basis)  per  employee  per  month,  so  that  each 
employee  received  a  monthly  earnings  of  at  least  EUR  584,  which  is  equal  to  the 
minimum wage.  

 (5)    Government  Regulation  no.  26  “Erivajadusega  lapse  vanema  toetuse  saamise  ja 
maksmise  tingimused  ning  toetuse  arvutamise  alused”,  of  9  April  20204,  as  it  is 
referred  to  in  Estonia’s  request  of  4  February  2021,  introduced  an  allowance  for  the 
preservation  of  earnings  for  parents  who  during  the  emergency  situation  had  to 
suspend  work  to  take  care  of  their  children  with  special  educational  needs.  It  was  a 
temporary  measure  for  the  period  of  the  emergency  situation  from  12  March  to  17 
May  2020.  The  allowance  was  calculated  on  the  basis  of  social  tax  paid  on  a 
respective parent's salaries or wages in 2019. The support covered 70% of an average 
daily salary or wages of one parent.  

tööjõukulu 

spordiklubile 

toetuse  määramise 

(6)  Minister  of  Culture  Regulation  no.  7  “COVID-19  haigust  põhjustava  koroonaviiruse 
levikuga  seotud  kriisi  leevendamiseks  ette  nähtud  toetusmeede  laulu-  ja  tantsupeo 
liikumises  osalevatele  kollektiividele”  of  30  April  20205  and  Minister  of  Culture 
Regulations  no.  9  “COVID-19  puhangust  tingitud  erakorraline  abi  kultuuri-  ja 
spordivaldkonnale”,  of  30  April  20206  (in  force  from  3  May  to  11  September  2020) 
tingimused,  sealhulgas  nõuded 
and  “Treeneri 
omaosalusele, 
spordialaliidule, 
treeningrühmale  ja  treenerile,  ning  toetuse  suuruse,  jaotamise,  tagasimaksmise  ja 
tagasinõudmise  kord”  of    26  November  2014,  as  amended  in  20207,  as  they  are 
referred to in Estonia’s request of 4 February 2021, introduced a short-term scheme for 
freelance artists, sports coaches and heads of choirs and dance groups. It concerns  a 
temporary  measure  for  the  period  of  the  emergency  situation  due  to  the  COVID-19 
outbreak. Freelance artists were supported in an amount equal to the minimum salary 
for a period of two months. Heads of choirs and folk dance groups and sports coaches 
were  provided  with  government  income  support  that  represented  70%  of  average 
salary or wages  for the period from  October 2019 to  February 2020, capped at  EUR 
1000.  Sports  coaches  were  supported  in  the  amount  of  50%  of  their  regular 
salary/wages, the other 50% being paid by sports organisation. 

spordikoolile 

selle 

ning 

ja 

(7)  

Estonia also introduced a series of health-related measures to address the COVID-19 
outbreak. Under the Parliament Act “Riigi 2020. aasta lisaeelarve seadus” adopted on 
15 April 20208, as it is referred to in Estonia’s request of 4 February 2021, is a health 
related  measure,  which  allowed  government  purchases  of  personal  protective 
equipment,  additional general supplies and consumables.  

(8)   Government  Regulation  no.  28  “Eriolukorras  Eesti  Haigekassa  kaudu  hüvitiste  ja 
teenuste eest maksmise tingimused ja kord”, of 23 April 20209, as it is referred to in 
Estonia’s  request  of  4  February  2021,  introduced  a  short-term  support  scheme  for 

3 
4 
5 
6 
7 
8 
9 

RT I, 30.05.2020, 4  
RT I, 10.04.2020, 5. 
RT I, 30.04.2020, 28. 
RT I, 09.09.2020, 4. 
RT I, 05.05.2020, 21. 
RT I, 21.04.2020, 2. 
RT I, 24.04.2020, 13. 

EN 

5 

  EN 

                                                 
(9) 

hospitals  to  compensate  for  the  costs  of  hiring  temporary  staff  for  COVID-19  units 
and  intensive  care  units,  and  paying  for  extended  working  hours  for  doctors,  nurses 
and other staff. It covers the costs of an additional need for staff in COVID-19 units 
and intensive care units in hospitals. The additional staff was hired with higher salary 
(coefficient 2.0) to keep the staff motivated during the emergency situation.  

Finally,  Government  Regulation  no.  28  “Eriolukorras  Eesti  Haigekassa  kaudu 
hüvitiste  ja  teenuste  eest  maksmise  tingimused  ja  kord”,  of  23  April  202010,  as  it  is 
referred  to  in  Estonia’s  request  of  4  February  2021,  introduced  a  compensation  for 
employees  for  the  first  three  days  of  sick  leave.  It  was  a  temporary  measure  for  the 
emergency situation period from 13 March to 17 May 2020. Increased use of sick and 
care leaves due to COVID-19 were compensated for persons insured by the Estonian 
Health Insurance Fund for the first three days of sickness, which is normally paid by 
the employee.  

(10)   Estonia fulfils the conditions for requesting financial assistance set out in Article 3 of 
Regulation  (EU)  2020/672.  Estonia  has  provided  the  Commission  with  appropriate 
evidence  that  the  actual  public  expenditure  has  increased  by  EUR  230  000  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  it  is  related  to  both  new  measures  and  an  increased  demand  for  existing 
measures, which together cover a significant proportion of the labour force in Estonia.  

(11)  The Commission has consulted Estonia and verified the sudden and severe increase in 
the actual 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 4 February 2021, in accordance with 
Article 6 of Regulation (EU) 2020/672. 

(12)  Financial  assistance  should  therefore  be  provided  with  a  view  to  helping  Estonia  to 
address the socio-economic effects of the severe economic disturbance caused by the 
COVID-19  outbreak.  The  Commission  should  take  the  decisions  concerning 
maturities,  size  and  release  of  instalments  and  tranches  in  close  cooperation  with 
national authorities. 

(13)  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  of  the  Treaty.  It  does  not  override  the 
requirement  for  Member States  to  notify  instances  of  potential  State  aid  to  the 
Commission under Article 108 of the Treaty. 

(14)  The  decision  to  provide  financial  assistance  has  been  reached  taking  into  account 
existing  and  expected  needs  of  Estonia,  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: 

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

Article 1 

10 

RT I, 24.04.2020, 13.  

EN 

6 

  EN 

                                                 
1. 

2. 

3. 

4. 

5. 

6. 

Article 2 

The  Union  shall  make  available  to  Estonia  a  loan  amounting  to  a  maximum  of 
EUR 230 000 000. 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 this Decision has taken effect. 

The Union financial assistance shall be made available by the Commission to Estonia 
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. 

Estonia  shall  pay  the  cost  of  the  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 related to the loan granted under paragraph 1 
of this Article. 

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

Estonia may finance the following measures:  

Article 3 

(a) 

(b) 

(c) 

(d) 

(e) 

a  short-term  labour  market  scheme  for  the  preservation  of  jobs,  as  provided  for  by 
the  Government  Regulation  no.130  “Tööhõiveprogramm  2017–2020”  of  17 
November 2016, as amended in 2020; 

an allowance for the preservation of income for  parents  who during the emergency 
situation had to suspend work to take care of their children with special educational 
needs,  as  provided  for  by  the  Government  Regulation  no.  26  “Erivajadusega  lapse 
vanema toetuse saamise ja maksmise tingimused ning toetuse arvutamise alused” of 
9 April 2020; 

a  short-term  scheme  for  freelance  artists,  sports  coaches  and  heads  of  choirs  and 
dance groups, as provided for by the Minister of Culture Regulations no.7 “COVID-
19  haigust  põhjustava  koroonaviiruse  levikuga  seotud  kriisi  leevendamiseks  ette 
nähtud toetusmeede laulu- ja tantsupeo liikumises osalevatele kollektiividele”, of 30 
April  2020  and  Regulations  no.  9  “COVID-19  puhangust  tingitud  erakorraline  abi 
kultuuri-  ja  spordivaldkonnale”  of  30  April  2020  and  “Treeneri  tööjõukulu  toetuse 
ja 
määramise 
spordikoolile  ning  selle  omaosalusele,  treeningrühmale  ja  treenerile,  ning  toetuse 
suuruse, jaotamise, tagasimaksmise ja tagasinõudmise kord” of 26 November 2014, 
as amended in 2020; 

tingimused,  sealhulgas  nõuded  spordialaliidule,  spordiklubile 

a health related measure, which allowed government purchases of personal protective 
equipment,  additional  general  supplies  and  consumables,  as  provided  in  the 
Parliament Act “Riigi 2020. aasta lisaeelarve seadus” of 15 April 2020; 

a  short-term  support  scheme  for  hospitals  to  compensate  for  costs  of  hiring 
temporary  staff  for  COVID-19  units  and  intensive  care  units,  and  paying  for 

EN 

7 

  EN 

extended  working  hours  for  doctors,  nurses  and  other  staff,  as  provided  for  by 
Government  Regulation  no.  28  “Eriolukorras  Eesti  Haigekassa  kaudu  hüvitiste  ja 
teenuste eest maksmise tingimused ja kord” of 23 April 2020; 

(f) 

a compensation for employees for the first three days of sick leave, as provided for 
by the Government Regulation no. 28 “Eriolukorras Eesti Haigekassa kaudu hüvitiste 
ja teenuste eest maksmise tingimused ja kord” of 23 April 2020. 

This Decision is addressed to the Republic of Estonia. 

This Decision shall take effect on the date of its notification to the addressee. 

Article 4 

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

Done at Brussels, 

Article 5 

For the Council 
The President 

EN 

8 

  EN