Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) 2020/1352 granting temporary support pursuant to Regulation (EU) 2020/672 to the Republic of Malta to mitigate unemployment risks in the emergency following the COVID-19 outbreak
Date: 2021-03-29
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU loan, Malta, aid to undertakings, coronavirus disease, emergency aid, employment aid, epidemic, fight against unemployment, public expenditure, self-employed person

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 29.3.2021  COM(2021) 163 final 2021/0086 (NLE)  Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision (EU) 2020/1352 granting temporary support pursuant to Regulation (EU) 2020/672 to the Republic of Malta 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  25  September  2020  the  Council  granted  financial  assistance  to  Malta  with  a  view  to 
complementing  its  national  efforts  to  address  the  impact  of  the  COVID-19  outbreak  and 
respond  to  the  socioeconomic  consequences  of  the  outbreak  for  workers  and  the  self-
employed. 

On 10 March 2021, Malta submitted a new request for Union financial assistance under the 
SURE Regulation. 

In accordance with Article 6(2) of the SURE Regulation, the Commission has consulted the 
Maltese authorities to verify the sudden and severe increase in actual and planned expenditure 
directly related to Malta’s labour market measures and caused by the COVID-19 pandemic. In 
particular,  the  increased  expenditure  for  which  additional  financial  assistance  is  being 
requested pertains to the existing measure referred to in Council Implementing Decision (EU) 
2020/1352: 

(a) 

a  COVID-19  wage  supplement,  which  covers  employees  and  self-employed 
individuals,  to  address  the  disruption  caused  by  the  pandemic.  Between  March  to 
June 2020, full-time employees working in the sectors hardest hit by the crisis listed 
in  Annex  A  were  eligible  for  wage  support  of  EUR  800  per  month  (EUR  500  per 
month for part-time employees). In less affected sectors listed in Annex B, full-time 
employees were able to receive EUR 160 per month (EUR 100 per month for part-
time  employees).  In  July  2020  the  list  of  sectors  included  in  the  two  annexes  was 
revised.  Sectors  previously  supported  under  the  scheme  but  not  included  in  the 
updated Annex A or B were assisted with a wage supplement of EUR 600 for full-
time employees. The scheme featuring these conditions was extended until the end of 
2020. As of January 2021, the size of the wage supplement  reflects  a drop in  sales 
over six months between March and October 2019 against turnover declared over six 
months between March and October 2020. Where no VAT records are available, the 
wage supplement is disbursed based on the criteria applicable in 2020. The scheme is 
envisaged  to  run  until  the  end  of  2021.  In  the  second  half  of  2021,  support  will 
remain in effect in line with the set parameters for the accommodation and catering 
activities. For other eligible activities it will decline to 66% in the third quarter and 
further to 33% in the last quarter of the year. The scheme will remain available only 
for  those  enterprises  who  were  eligible  for  the  support  already  under  the  original 
scheme.  According  to  the  new  rules,  the  scheme  will  also  cover  replacement  of 
employees  (i.e.  replacing  those  who  voluntarily  terminated  their  employment  after 
June 2020) as long as the original number of employees as at end of May 2020 is not 
exceeded. Only the part of the public expenditure related to the employees who were 

EN 

1 

  EN 

 
 
continuously in employment was requested by the authorities and excluding the part 
for these newly hired employees.  

Malta 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 Malta under the SURE Regulation 
in support of the measure above.  

• 

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.   

• 

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.  

• 

Proportionality 

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

EN 

2 

  EN 

 
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 

2021/0086 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

amending Implementing Decision (EU) 2020/1352 granting temporary support pursuant 
to Regulation (EU) 2020/672 to the Republic of Malta 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 outbreak1, and in particular Article 6(1) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

On  25  September  2020,  the  Council  granted  financial  assistance  to  Malta  taking  the 
form  of  a  loan  amounting  to  a  maximum  of  EUR 243 632 000  with  a  maximum 
average maturity of 15 years, following the Malta’s request of 07 August 2020, 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  loan  was  to  finance  the  short-time  work  schemes,  similar  measures  and  health-
related measures adopted by Malta, as referred to in Council Implementing Decision 
(EU) 2020/13522.  

The COVID-19 outbreak continues to immobilise a substantial part of the labour force 
in  Malta.  This  has  led  to  a  still  sudden  and  severe  increase  in  public  expenditure  by 
Malta in respect of the measure referred to in Article 3(a) of Implementing Decision 
(EU) 2020/1352.  

The  COVID-19  outbreak  and  the  extraordinary  measures  implemented  by  Malta  in 
2020  and  2021  to  contain  the  outbreak  and  its  socio-economic  and  health-related 
impact  had  and  still  have  a  dramatic  impact  on  public  finances.  According  to  the 
Commission's  2020  autumn  forecast,  Malta  was  expected  to  have  a  general 
government  deficit  and  debt  of  9.4%  and  55.2%  of  gross  domestic  product  (GDP) 
respectively  by  the  end  of  2020.  In  2021,  Malta’s  general  government  deficit  is 
forecast  to  narrow  to  6.3%  while  debt  is  forecast  to  increase  to  60.0%  of  GDP. 
According  to  the  Commission’s  2021  winter  interim  forecast,  Malta’s  GDP  is 
projected to increase by 4.5% in 2021. 

1 
2 

OJ L 159, 20.5.2020, p. 1. 
Council Implementing Decision (EU) 2020/1352 of 25 September 2020 on granting temporary support 
under  Regulation  (EU)  2020/672  to  the  Republic  of  Malta  to  mitigate  unemployment  risks  in  the 
emergency following the COVID-19 outbreak, OJ L 314, 29.09.2020, p. 42.  

EN 

4 

  EN 

                                                 
(5) 

(6) 

On 10 March 2021, Malta requested further financial assistance from the Union in an 
amount  of  EUR 177 185 000  with  a  view  to    continue  complementing  its  national 
efforts undertaken in 2020 and 2021 to address the impact of the COVID-19 outbreak 
and respond to the socioeconomic consequences of the outbreak for workers and the 
self-employed. In particular it concerns the measure set out in recital 6.  

‘Malta Enterprise Act (Chap. 463 of the Laws of Malta)’/‘L-Att dwar il-Korporazzjoni 
għall-Intrapriża  ta’  Malta  (Kap.  463  tal-Liġijiet  ta’  Malta)’  and  ‘Government  Notice 
No  389  of  13  April  2020’/‘Notifikazzjoni  tal-Gvern  Nru  389  tat-13  ta’  April  2020’, 
which  is  referred  to  in  Article  3(a)  of  Implementing  Decision  (EU)  2020/1352, 
introduced  a  COVID-19  wage  supplement,  which  covers  employees  and  the  self-
employed, to address the disruption caused by the pandemic. Between March to June 
2020,  employees  working  in  the  sectors  hardest  hit  by  the  crisis  listed  in  Annex  A, 
referred to in the Government Notice were eligible for wage support of EUR 800 per 
month for full-time employment. In less affected sectors listed in Annex B, referred to 
in  the  Government  Notice,  full-time  employees  were  able  to  receive  EUR  160  per 
month. Support was available also to part-time employees for a lower amount. In July 
2020  the  list  of  sectors  included  in  the  two  annexes  was  revised.  Sectors  previously 
supported  under  the  scheme  but  not  included  in  the  updated  Annex  A  or  B  were 
assisted  with  a  wage  supplement  of  EUR  600  for  full-time  employees.  The  scheme 
featuring these conditions was extended until the end of 2020. As of January 2021, the 
size of the wage supplement reflects a drop in sales over six months between March 
and  October  2019  against  turnover  declared  over  six  months  between  March  and 
October 2020. Where no VAT records are available, the wage supplement is disbursed 
based on the criteria applicable in 2020. The scheme is envisaged to run until the end 
of 2021. In the second half of 2021, support will remain in effect in line with the set 
parameters for the accommodation and catering activities. For other eligible activities 
it will decline to 66% in the third quarter and further to 33% in the last quarter of the 
year. The scheme will remain available only for those subjects who were eligible for 
the  support  already  under  the  original  scheme.  Currently,  it  is  applied  in practice  by 
the  ‘Malta  Enterprise’  and  it  will  be  specified  in  a  forthcoming  Government  Notice. 
According to the new rules, the scheme will also cover replacement of employees (i.e. 
replacing those who voluntarily terminated their employment after June 2020) as long 
as the original number of employees as at end of May 2020 is not exceeded. Only the 
part  of  the  public  expenditure  related  to  the  employees  who  were  continuously  in 
employment was  requested by the  authorities and excluding the part  for these newly 
hired employees.  

that 

(7)  Malta  fulfils  the  conditions  for  requesting  financial  assistance  set  out  in  Article  3  of 
Regulation  (EU)  2020/672.  Malta  has  provided  the  Commission  with  appropriate 
evidence 
increased  by 
the  actual  and  planned  public  expenditure  has 
EUR 427 961 805 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 directly related to the extension of an existing national job 
measure similar to short-time work that covers a significant proportion of undertakings 
and  of  the  labour  force  in  Malta.  Malta  financed  EUR 7 144 805  of  the  increased 
amount of public expenditure through its own financing. 

(8) 

The Commission has consulted Malta and verified the sudden and severe increase in 
the  actual  and  planned  public  expenditure  directly  related  to  a  measure  similar  to 
short-time  work  referred  to  in  the  request  of  10  March  2021,  in  accordance  with 
Article 6 of Regulation (EU) 2020/672. 

EN 

5 

  EN 

(9) 

Financial  assistance  should  therefore  be  provided  with  a  view  to  helping  Malta  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. 

(10)  Malta  and  the  Commission  should  take  this  Decision  into  account  in  the  loan 

agreement referred to in Article 8(2) of Regulation (EU) 2020/672.  

(11)  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  pursuant  to  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. 

(12)  Malta 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 Malta has implemented that expenditure. 

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

Implementing Decision (EU) 2020/1352 is amended as follows:  

Article 1 

(1) 

Article 2 is amended as follows: 

(a) 

paragraph 1 is replaced by the following:  

‘1.  The  Union  shall  make  available  to  Malta  a  loan  amounting  to  a  maximum  of 
EUR 420 817 000. The loan shall have a maximum average maturity of 15 years.’; 

(b)  paragraph 4 is replaced by the following:  

‘4.  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.  Any  further 
instalments shall be released in accordance with the terms of such loan agreement or, 
where relevant, be subject to the entry into force of an addendum to the latter, or an 
amended loan agreement concluded between Malta and the Commission.’; 

(2) 

Article 3 is replaced by the following:  

Malta may finance the following measures: 

‘Article 3 

(a) 

the  COVID-19  wage  supplement,  as  provided  for  in  ‘Malta  Enterprise  Act 
(Chap.  463  of  the  Laws  of  Malta)’/‘L-Att  dwar  il-Korporazzjoni  għall-
Intrapriża ta’ Malta (Kap. 463 tal-Liġijiet ta’ Malta)’ and ‘Government Notice 

EN 

6 

  EN 

 
 
No  389  of  13  April  2020’/‘Notifikazzjoni  tal-Gvern  Nru  389  tat-13  ta’  April 
2020’, as extended and amended in 2020 and 2021; 

the  COVID-19  disability  benefit,  as  provided  for  in  ‘Government  Notice  No 
331  of  25  March  2020’/‘Notifikazzjoni  tal-Gvern  Nru  331  tal-25  ta’  Marzu 
2020’; 

the COVID-19 parent benefit, as provided for in ‘Government Notice No 330 
of 25 March 2020’/‘Notifikazzjoni tal-Gvern Nru 330 tal-25 ta’ Marzu 2020’; 

the COVID-19 medical benefit, as provided for in ‘Government Notice No 353 
of 30 March 2020’/‘Notifikazzjoni tal-Gvern Nru 353 tat-30 ta’ Marzu 2020’;  

(b) 

(c) 

(d) 

(3) 

Article 4 is replaced by the following:  

‘Article 4 

1.  Malta shall inform the Commission by 30 March 2021, and every six months 
thereafter  of  the  implementation  of  the  planned  public  expenditure  until  that 
planned public expenditure has been fully implemented.  

2.  Where  measures  referred  to  in  Article  3  are  based  on  planned  public 
expenditure  and  have  been  subject  to  an  Implementing  Decision  amending 
Implementing  Decision  (EU)  2020/1352,  Malta  shall  inform  the  Commission 
within 6 months after the date of adoption of that decision, and every 6 months 
thereafter  of  the  implementation  of  the  planned  public  expenditure  until  that 
planned public expenditure has been fully implemented.’ . 

This Decision is addressed to the Republic of Malta. 

Article 2 

Done at Brussels, 

For the Council 
The President 

EN 

7 

  EN