Covid-19 and Government Recovery Plans

It remains unclear how national economies and global markets will be transformed once we emerge from the restrictions in place due to Covid-19. All the while, governments across the globe are grappling with the pitfalls of quickly establishing policy in an ever-changing environment, invariably leading to significant disparities in how different jurisdictions are reacting.

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

This week the Prime Minister Boris Johnson announced the easing of lockdown measures across England. From July 4, restaurants, pubs and hairdressers will be able to open alongside hotels, holiday apartments, campsites and caravan parks and a range of other venues.

• Indoor gyms, swimming pools, nail bars and indoor play areas are among the list of businesses that will remain closed. Culture Secretary, Oliver Dowden, has stated that indoor gyms can expect to reopen in mid-July
• It came as the Prime Minister updated social distancing guidelines with a ‘one metre plus’ rule introduced, though Johnson and CMO Chris Whitty have said people should try and remain 2 metres apart where possible
• Fast food chain McDonalds has reopened 280 of its sites for walk in takeaway purchases. It is yet to announce when in store dining will be allowed to resume
• The Government has introduced legislation to help businesses adjust to new social distancing requirements. The Business and Planning Bill aims to help businesses adjust to new ways of working and includes provisions to temporarily extend construction hours
• Ministers are said to be finalising plans for a series of “travel corridors” with other European countries that will mean people arriving into the UK will not need to self-isolate, and vice versa. The Government said it would review the quarantine every three weeks with the first review due on June 29

Stimulus and Economic Measures

• Business Minister Nadhim Zahawi announced that the UK’s automotive industry is to receive £73.5million to develop green technologies and safeguard jobs. Ten projects across the UK will receive a share of this new investment to develop technology for electric taxis, cars and vans – including recyclable batteries, advanced electrical systems and ultra-lightweight components
• Councils in England will be given an extra £105m to support rough sleepers put up during lockdown. The Government says that the extra funding will ensure that people will not have to return to the streets when hotels reopen on 4 July
• The Chancellor is said to be drawing up plans for deferred tax raises and cuts to public spending in his autumn Budget after a further fiscal stimulus for the UK economy later in the summer. The Treasury is said to be considered a temporary cut to VAT and further sectoral reductions, including for the tourism sector

EU

Exit Strategy for Business

• EU Member States are discussing the possibility of limited reopening of the external EU borders in July. This will allow certain non-EU travellers coming from countries where the virus has been contained to enter the bloc
• EU Ambassadors are still negotiating the exact epidemiological criteria according to which the initial list of countries will be drawn. The list should be finalised by 1 July and will be updated on a regular basis afterwards to reflect the evolution of epidemiological conditions

Stimulus and Economic Measures

• Member States and the European Parliament reached an agreement on temporary amendments to the EU banking rules aimed at maximising the capacity of banks to lend money to households and businesses hit by the COVID-19 crisis
• The targeted amendments will ease capital requirements and allow extra flexibility on supervisory and accounting standards amongst others
• The package of measures will become applicable at the latest by end June 2020

Germany

Exit Strategy for Business

• Tests extended on the coronavirus: New regulation has mandated for tests on a larger scale to be made available for people who do not show signs of illness. The tests will be paid for by the statutory health insurance companies. Comprehensive tests in nursing homes, schools or day care centres are now also being rolled out. The regulation came into force retroactively as of 14 May.

Stimulus and Economic Measures

• Priorities for the German Presidency: Under the motto “Together. Make Europe strong again.” Germany has defined its priorities for the German Presidency of the Council of the European Union. The cabinet has now approved the draft presidency programme. The programme focuses on immediate response to the Covid-19 pandemic. The key tenets state that the virus must be contained, the European economy rebuilt and social cohesion in Europe strengthened. Germany will also seek to advance other important issues, including climate change and digitization, while strengthening Europe’s external affairs programme.
• €500 million for training places: The Federal Government is securing training places that are threatened by the coronavirus pandemic. The Cabinet has launched an aid program for small and medium-sized enterprises that provide further training.

Ireland

Exit Strategy for business

• Ireland remains in Phase Two of a now four phase plan to exit the restrictions imposed due to COVID-19. Currently, the country will move to Phase Three from the 29 June. However, this week the Government accelerated plans to exit the restrictions and added several measures to Phase Three, including:
  • sporting activities to resume with limitations on the number of spectators permitted
  • places of worship, gyms, cinemas, leisure facilities, and hairdressers and barber shops to resume business
  • mass gatherings of up to 50 people indoors and 200 people outdoors
  • creches and childcare facilities, summer camps, youth clubs and adult educational facilities to reopen
  • cafés and restaurants, as well as pubs and hotel bars operating as restaurants, to begin offering food on premises again
  • hotels, hostels, caravan parks and holiday parks to reopen
• The Government looks set to make the wearing of a face covering compulsory on all forms of public transport, while also ending the two-metre physical distancing rule on public transport

Stimulus and Economic Measures

• A new initiative has been launched aimed at helping Irish Small and Medium Enterprise owners and managers across all sectors to prepare and implement a Return to Work Safely Plan for the reopening of their business. The Initiative – ‘ReBound – Back to Business. Safely’ is being offered by Skillnet Ireland in partnership with Ibec, Chambers Ireland, the NSAI and the Small Firms Association
• There has been a further reduction of of approximately 32,800 on the number of people availing of the weekly payment of €350 under the COVID-19 Pandemic Unemployment Payment scheme. Approximately 465,900 people remain on teh scheme
• A funding package of up to €70 million has been approved to support the sports sector
• €25 million in extra supports to help the Arts and Culture sector were announced last week. It will include bursaries and commissions to artists and arts organisations, as well as resources for museums and culture workers as they prepare for the re-opening of society
• On Friday the government agreed to make an Order to extend the emergency period during which rent increases and tenancy terminations (in all but limited and exceptional cases) are prohibited. The emergency period will be extended to 20 July 2020

KSA

Exit Strategy for business

• Saudi Arabia has lifted its nationwide lockdown across all regions – economic and commercial activities are to resume, but bans on international travel remain
• The Kingdom’s coronavirus cases have now surpassed 160,000
• Saudi Arabia has limited Hajj pilgrim numbers to less than 1,000 to protect public health in the wake of the coronavirus pandemic
• The General Directorate of Saudi Passports announced that expatriate residents abroad will not be allowed to return to the Kingdom until after the end of the coronavirus crises

Stimulus and Economic Measures

• Saudi Arabia plans to start a tourism development fund with an initial $4 billion investment as part of plans to diversify the economy in the face of the coronavirus pandemic and low oil prices

South Africa

Exit Strategy for business

Additional changes to Level 3 regulations have been announced, as the Government continues to look at ways of opening up the economy:

• New ICT Workers Health and safety rules around electronic communications serv​ices and electronic communications network services have been introduced
• Additional regulations for broadcasting services including online services, advertising agencies and film productions have been proposed
• Rules around postal services including courier services have been updated
• Additional education facilities are now beginning to open up: the return of pre-Grade R and Grade R learners; provision for special needs learners; the holding of matric exams; the reopening of hostels; and provisions for learners that do not return to school.

Stimulus and Economic Measures

An emergency budget was held on 24 June, in light of the evolving situation in relation to the spread of COVID-19:

• Health care will get R21.5-billion for Covid-19 spending, and a further R12.6-billion to frontline services, from modelling to screening.
• Provinces get another R5-billion for catch-up programmes, as schools are closed for at least three months now.
• Another R19.6-billion will go to the Presidential Youth Employment Intervention, which earlier this year had already been allocated R6.1-billion.
• External support: The government intends to borrow $7bn (R121bn) from international finance institutions
• Covid-19 loan guarantee scheme: The scheme lent R10bn in its first month of operation.

UAE

Exit strategy for business

• Health officials in the UAE announced on Wednesday the lifting of night-time movement restrictions in the country
• The UAE has also announced the launch of the world’s first phase III clinical trial of a Covid-19 inactivated vaccine – if successful, the vaccine could enter the market by the end of 2020 or early 2021
• A set of guidelines were issued earlier this week for a possible reopening of schools, universities and nurseries in the next academic year in September
• New travel protocols were released by the Dubai Government to facilitate international travel for UAE citizens, residents and tourists, and open the Emirate to business and leisure visitors from 7 July, while putting in place careful measures

Stimulus and Economic Measures

• The Central Bank of the UAE, the Dubai Government and the Abu Dhabi Executive Council has launched 227 economic and commercial incentives for individuals, SMEs, retail and corporate customers since the beginning of the crisis
• Many UAE banks look set to implement drastic cost cutting measures to curb profit losses resulting from sharp decline in revenues and a potential spike in non-performing assets