Covid-19 and Government Recovery Plans

As restrictions on society and businesses ease across much of Europe and the Middle East, a new group of public policy challenges have materialized as Governments balance public health concerns with restarting economies as quickly as possible. Finding this balance is crucial, and results in unprecedented and far-reaching, financial, welfare and regulatory programs emerging daily across countries and regions.

Our Public Policy Teams in London, Dublin, Brussels, Berlin, UAE, Saudi Arabia and Johannesburg are helping clients navigate Government recovery plans and below is a snapshot of these plans.  Should you wish to explore further or need advice on how to navigate these systems, please do get in touch.

UK

Exit Strategy for Business

• Culture and Sport Secretary Oliver Dowden has announced that outdoor pools can open this weekend with indoor gyms, swimming pools and sports facilities to reopen from July 25 across England.
• The Government has also announced that outdoor performances in front of audiences will be able to resume from 11 July, alongside recreational sport. The Government is working with the sector to see how indoor performances can be safely resumed soon.
• Beauticians, tattooists and tanning salons are able to re-open in England from Monday 13 July, with some exclusions for some high-risk procedures.
• Scottish First Minister has announced the easing of some restrictions meaning people can now go to beer gardens and cafes as well as providing air corridors to ‘green list’ countries on the UK’s updated quarantine list.
• This week food chain Nando’s began reopening stores across England and popular high street coffee chain Costa has begun reopening seating in some of its restaurants.

Stimulus and Economic Measures

Chancellor Rishi Sunak delivered his Summer Economic Update with a focus on protecting jobs and encouraging consumer spend. Key measures include:

• A three-point jobs plan to help people, especially young people, find, create and protect jobs including incentives to create apprenticeships and jobs for people under 25 and bonuses for employers who bring back and keep furloughed workers in a job until January
• Raising the Stamp Duty threshold to £500,000 until March 2021 to stimulate and maintain confidence in the housing market
• Grants for energy efficiency measures in people’s homes and a programme to decarbonise socially rented homes and the public sector
• Temporary cut in VAT, from 20% to 5%for food from cafes, restaurants and pubs as well as accommodation and tickets to attractions
• Introducing the Eat Out to Help Out scheme that will see the Government subsidise discounts on meals Monday through Wednesday in August
• The Government has unveiled a £1.57bn support package designed to protect the future of Britain’s museums, galleries and theatres. Independent cinemas, heritage sites and music venues are also eligible for the emergency grants and loans.

EU

Stimulus and Economic Measures

• The European Commission published its Interim European Economic Forecast for Summer 2020 which explores the economic impact of the pandemic and predicts a deep recession in the second half of the year
• The forecast projects that the euro area economy will contract by 8.7% in 2020 and grow by 6.1% in 2021. The EU economy as a whole is forecast to contract by 8.3% in 2020 and grow by 5.8% in 2021
• Those projections are notably more pessimistic than earlier estimates which predicted a contraction of 7.7% and 7.4% respectively

Germany

Exit Strategy for Business

• German industry recovers slightly: After the sharp decline caused by the COVID-19 pandemic, the industry is beginning to show of recovery. According to surveys, consumer mood has also improving. However, one fifth of companies are still focused on survival
• Voluntary voucher redemption decided: In order to prevent the insolvency of tour operators, the industry can now offer their customers a voucher for cancelled tours instead of an immediate refund of the tour price. There is no obligation to accept the voucher
• Wearing a mask remains obligatory: The obligation to wear a mask in the public transport as well as in shops and supermarkets remains obligatory throughout Germany
• The Corona App can now be used throughout the EU: The Corona-Warning App is now available for downloading in all 27 member states of the European Union – as well as in Switzerland, Norway and the UK

Stimulus and Economic Measures

• 5-point package for the export industry: The Minister for Economic Affairs Peter Altmaier has presented a 5-point package to improve the financial conditions for export-oriented companies
• Additional assistance for small and medium-sized enterprises launched: Small and medium-sized enterprises can now apply for government-backed financial assistance. The grants do not have to be paid back and are intended to help ensuring the economic survival of the companies and self-employed persons
• 550 million euros for digital learning: The federal and state governments are investing in the acquisition of mobile devices for pupils. Education Minister Anja Karliczek launched the emergency programme on 3 July
• Rescue programme for cultural institutions: The federal government has launched new supports for cultural institutions and projects with a €1 billion fund
• EU loan for vaccine development in Germany: The Tübingen-based company Curevac is conducting research on a vaccine against the COVID-19 virus and started the first clinical trial on humans in June. It is receiving €75 million from the European Investment Bank
• EU Commission approves German corona aid: The EU Commission has approved the Economic Stabilisation Fund – an important component of the German aid programme

Ireland

Exit Strategy for business

• The Irish Government launched its COVID Tracker App this week, enabling user devices to record contact tracing and monitor users’ symptoms for coronavirus. Over one million people have downloaded the app so far
• The government is still advising against all non-essential overseas travel. People visiting or returning to Ireland must complete a Passenger Locator Form and they are also asked to restrict their movements for 14 days
• The Department of Business, Enterprise and Innovation has launched a public consultation on updated guidelines for remote working. The department published Guidance for Working Remotely during COVID-19 and believe that much has changed since the publication of this initial guidance
• Following inspections, Gardaí found 26 potential breaches of the health regulations or licensing laws in restaurants while certain restrictions remain in place. In each case, the renewal of liquor license applications will be at risk unless compliance is observed
• The Department of Rural and Community Development and Pobal have produced information and guidance that will assist the voluntary sector as it prepares to fully reopen and recommence full services

Stimulus and Economic Measures

• The Tánaiste Leo Varadkar has said the Government’s July stimulus plan should be ready the week after next and will be a multi-billion euro package.
• A further €4.8 million investment into research in the area COVID-19 immunology was announced. The funding will go to a research partnership supported by Science Foundation Ireland (SFI) and Trinity College Dublin.
• The Irish Government has revealed that the cumulative value of payments made to employers under the Temporary Wage Subsidy Scheme, introduced at the beginning of the pandemic, is €1.97 billion.

KSA

Exit Strategy for business

• Saudi Arabia continues to see an upward trend in coronavirus cases, reporting 217,108 cases to date
• The Saudi Control and Anti-Corruption Authority (Nazaha) has initiated 105 corruption cases in the health, interior, power and education sectors amid the pandemic crisis
• Saudi Arabia has issued guidelines for about 1,000 pilgrims who will be allowed to perform the Hajj pilgrimage in Mecca later this month

Stimulus and Economic Measures

• Saudi Arabia, in its capacity as president of the G20 group of nations, has unveiled policy recommendations to all G20 members to jump start the global economy, advocating for governments to build healthcare resilience, safeguard human capital, prevent financial instability, revive productive sectors and digitize economies
• The Kingdom is pressing ahead with plans to double the size and population of its capital city (Riyadh) in the next decade, despite the economic downturn caused by the pandemic crisis and low oil prices

South Africa

Exit Strategy for business

• South African restaurants are taking government to court over what they call ‘absurd’ alcohol and social distancing restrictions. Restaurants were allowed to open for sit-down dining in July, however, are prohibited from selling alcohol
• Eskom (South Africa’s national power utility) has warned that its winter load shedding schedule is likely to come into effect on Thursday, 9 July.  Citizens have been told to prepare for posssible blackouts
• Grades 6 and 11 pupils will return to school from 6 July, as well as some Grade R pupils. All private preschools and early care childhood development centres may open immediately
• The latest IHS Markit SA purchasing managers’ index (PMI), an economy-wide gauge of business conditions, showed a recovery in June to reach 42.5 points. Business conditions in the private sector improved as lockdown measures eased in June

Stimulus and Economic Measures

• The Department of Social Development says that the introduction of the R350 (USD20) COVID-19 Social Relief of Distress (SRD) grant has revived discussions of a basic income grant for South Africans between the ages of 18-59 who have no income support.
• S&P Global Ratings has joined other credit ratings in expressing doubt over SA’s plan for extensive spending cuts to stabilise the country’s soaring debt.
• The Reserve Bank has issued a R3.45bn guarantee to bail out the Corporation for Public Deposits (CPD), a government investment arm hit by surging defaults at state agricultural lender Land Bank. CPD purchased various debt instruments from Land Bank and overall, it suffered a R2.8bn loss in the 2019/2020 financial year

UAE

Exit strategy for business

• The Ministry of Health and Prevention announced on Tuesday that it conducted over 44,000 additional COVID-19 tests. In a statement, the Ministry affirmed its aim to continue expanding the scope of testing nationwide to facilitate the early detection of coronavirus cases and carry out the necessary treatment
• Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai, and Chairman of the Board of Trustees of Dubai Future Foundation (DFF) has launched a campaign to turn the UAE into a leading global centre for 3D printing
• Al Dar Shares & Bonds, a UAE brokerage, has joined Nasdaq Dubai as a Member to trade equity derivatives. The move is part of Abu Dhabi-based Al Dar’s growth strategy to expand and enhance its services to corporate and individual investors

Stimulus and Economic Measures

• Plans to streamline the structure of the UAE Government have been approved by the country’s president, Sheikh Khalifa bin Zayed Al Nahyan. The changes were announced on Sunday by Sheikh Mohammed bin Rashid Al Maktoum, vice president, prime minister and ruler of Dubai, through a series of posts on Twitter. It will see the appointment of nine women to senior positions with in government and the merger of around 50 percent of federal authorities with other authorities or ministries
• The Central Bank of the UAE, CBUAE, has published its Financial Stability Report, FSR, which provides information, analysis and an assessment of the resilience and matters that require additional support in the banking and financial system in the UAE, promoting public understanding and transparency
• H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance, has issued directives to exempt business tenants of Dubai Developments Group properties in the emirate, including small firms and entrepreneurs, from paying rents for periods ranging from three to six months