Covid-19 and Government Recovery Plans

As many European countries are seeing a marked resurgence in coronavirus cases, governments are moving quickly to implement effective and targeted measures that allow commercial and social activity to continue in some capacity.

To help businesses and organisations respond to an ever-changing policy landscape, our Public Policy teams in London, Brussels, Berlin, Dublin, Riyadh, Johannesburg and Dubai are helping clients navigate specific Government recovery plans and below is a snapshot of those 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

• Prime Minister Boris Johnson has announced new England-wide restrictions after Chief Scientific Adviser, Sir Patrick Vallance and Chief Medical Officer, Chris Whitty warned that if the UK continued on its current trajectory it could be facing high numbers of new Covid-19 cases. The PM has warned that restrictions could be in place for up to six months.
• The measures include suggesting office workers work from home if they can and a 10pm closing time in pubs and restaurants. Masks must now be worn by customers in pubs and restaurants except when eating and drinking.
• Tighter restrictions have been announced for the North East and the North West of England, including bans on households mixing; further restrictions have also been announced for some areas in Wales and Scotland.
• A new NHS app has been launched for England. It allows people to check into locations, provides postcode alerts on the coronavirus risk and allows you to book a Covid-19 test if your symptoms suggest you should.

Stimulus and Other Economic Measures

• Having announced the autumn Budget would be cancelled due to Covid-19 uncertainty, Chancellor Rishi Sunak has announced his Winter Economic Planamid fears of a second coronavirus wave.
• The Chancellor confirmed the furlough scheme will end on 31 October and be replaced by a Job Support Scheme that will see the Government subsidise the pay of employees who are working fewer hours due to reduced demand. For staff who can work at least a third of their usual hours, employers will pay staff for the hours they do work, and the Government and the employer will each cover one third of the lost pay.
• The Government has announced a package of support for those on lower incomes who are told to self-isolate. People who are required by law to self-isolate are eligible for a payment of £500 if they cannot work from home.
• The 5% rate of VAT will remain in place for hospitality and tourism until 31 March 2021. Businesses who deferred their VAT will no longer have to pay a lump sum at the end of March next year.
• Discount chain B&M has said it will open up to 45 new stores this year after sales soared during the coronavirus lockdown. It comes as Wetherspoons has said it will cut almost half its staff at airports and Whitbread, the owner of Premier Inn, has said it could axe up to 6,000 jobs.

EU

Exit Strategy for Business

• The EU tourism ministers met for an informal exchange of views aimed at assessing the conditions necessary to allow more private and business travel in Europe. Ministers agreed that future border closures should be avoided at all costs and continuation of travel should be ensured as much as possible.
• They also called for closer coordination within the EU Member States it comes to travel recommendations, quarantine, and testing requirements.

Stimulus and Other Economic Measures

• The European Central Bank (ECB) launched a review of its main pandemic crisis-fighting tool, the so-called Pandemic Emergency Purchase Programme (PEPP). The aim of the review is to assess how long the tool should continue to operate as well as whether some of its extra flexibility (e.g. its flexible interpretation on the rules on bond-buying) should be transferred to the ECB’s longer running asset-purchase schemes.
• The ECB granted additional capital relief for banks in an attempt to free up more funds and encourage lending to EU governments, businesses and households.
• The European Financial Supervisory Authorities (ESAs) published their first joint risk assessment report on the financial sector since the start of the COVID-19 pandemic.
• According to the report, the EU banks’ liquidity positions remain relatively strong but the EU investment fund industry faces a significant deterioration in asset liquidity in some segments.
• The European Banking Authority meanwhile removed its guidance on moratoria on the repayment of loans from companies and individuals which were introduced earlier in the pandemic.

Germany

Exit Strategy for Business

• Chancellor Merkel appeals to the population in the Bundestag: Merkel has called on citizens to continue to adhere to the measures to contain the corona pandemic. She called on people to “follow the rules”, stating that “this not only protects risk groups, but our open society as a whole”.
• Chancellor Merkel defends the suspension of the debt brake: commenting on public finance borrowing, Merkel stated that “Despite the high level of new debt, the objective is to return to a constitutionally compliant budget in order to become resilient to future challenges”.
• Federal government promotes new rapid test: The German Government is funding a new rapid coronavirus test from Bosch, in which a result should be available in 39 minutes.
• Priority for education and business: Following talks between the Federal Chancellor and the heads of the federal state governments, distance and hygiene rules were retained and contact tracing remains a top priority in the fight against the virus.
• Travel warning for other parts of Europe: The Federal for Foreign Affairs has issued travel warnings for other regions in Europe due to the increased number of Covid-19 cases. This means that 15 of the 27 EU countries are now at least partially classified as coronavirus risk areas.
• First 100 days of Corona Warning App: The app was downloaded over 18 million times in the first 100 days of its availability and more than 1.2 million test results were transmitted. The aim is to link it to other European warning apps, in the future.

Stimulus and Economic Measures

• The Public health service will be strengthened: New funds for the Public Health Service from the Federal Government include €4 billion euro for personnel, digitisation and new structures.
• Focus on innovation, technology and new mobility: The new budget of the Federal Ministry of Economics includes expenditures of €4.46 billion, including €2.28 billion for space and aeronautics projects and €787.43 million for “New Mobility”.
• Financial relief for health funds: The new budget of the Ministry of Health includes €14.5 billion grants and payments by the Federal Government to established health funds for Sars-CoV-2 pandemic.

Ireland

Exit Strategy for business

• At present, Level 2 restrictions apply to all counties except Dublin and Donegal. Level 3 restrictions are in place in Dublin from midnight on 18 September, and Donegal from midnight 25 September. Level 3 restrictions will be reviewed in 3 weeks.
• The Irish Government is still currently advising against all non-essential travel abroad, apart from countries included on the Government’s ‘Covid-19 green list’ where the advice is to take ‘normal precautions’.
• The Government has confirmed that until 9 November 2020 (at least) all foreign travellers coming into Ireland must fill out a Passenger Locator Form to assist in contact tracing.
• Speculation is mounting in the media that the County and City of Cork will move to level 3 with further restrictions in place soon and if coronavirus cases continue to rise.

Stimulus and Economic Measures

• The Government has announced further stimulus packages for industries currently operating in regions that are in Level 3 restrictions – County Dublin and Donegal. Business impacted by 25% or more fall in turnover will be able to get a 30% top-up under the Restart Grant Plus Scheme.
• Skillnet Ireland is running a number of initiatives aimed at helping small businesses through current business challenges. The ReBound initiative gives small businesses online training and mentoring on implementing the return to work safely protocol. The MentorsWork initiative is a free 8-week mentoring programme to support business recovery and sustain a business.

KSA

Exit Strategy for Business

• The total number of confirmed Covid-19 cases in Saudi Arabia has reached over 335,605 with a 95.26% recovery rate.
• Travel restrictions are slowly easing, with the Kingdom set to launch an Umrah app to encourage in-bound religious tourism and support those wishing to travel out of the country for medical treatment.
• The General Authority for Statistics has recorded a negative growth rate of 10.1% and 3.5% respectively due to Covid-19, impact on non-oil GDP due to the lockdowns and the low oil prices.
• The Ministry of Education is currently working with Microsoft to develop the ‘Madrasati’ platform which will serve over 6 million students and their parents.

Stimulus and Economic Measures

• Saudi Arabia has extended its stimulus package by three months until January to help businesses recover from the effects of Covid-19.
• Saudi Arabia’s tourism fund has signed a deal with Riyad Bank and Banque Saudi Fransi to finance up to $43 billion worth of project to leverage more private sector investment in the Kingdom’s tourism sector.
• Speaking at a high-level meeting of the UN Alliance of Civilizations Group of Friends, Abdallah Al-Mouallimi, Saudi Arabia’s permanent representative to the UN, stressed the importance of the protection of human rights and elimination of any form of discrimination, racism and xenophobia to ensure an effective Covid-19 recovery.

South Africa

Exit Strategy for Business

• Moody’s lead analyst for South Africa, Lucie Villa, has said that the main economic concern going forward was the government’s “exit strategy” as it unwound Covid-19 economic support measures and reinstated the fiscal consolidation promised before the pandemic.
• The strict lockdown saw the economy contract by a record 51% in the second quarter on an annualised basis, or 16.4% in unadjusted terms, and the stimulus support has been criticised as too small and badly administered.
• South Africa’s Ministerial Advisory Committee (MAC) on the coronavirus has been augmented beyond biomedical members to include other experts from different sectors.
• To date South Africa has been effective in achieving transmission control, but the reconfigured committee, will now focus on maintaining low transmission rates by addressing gaps and targeting new challenges.

Stimulus and Economic Measures

• In a media briefing on 30 September, the National Coronavirus Command Council (NCCC) announced that South Africa would reopen its borders and ports of entry for international business and leisure travel on Thursday 1 October as guided by the recommendations published by the World Health Organisation (WHO)

UAE

Exit Strategy for Business

• The UAE recorded the biggest daily rise in cases on 30 September, with 1,100 infections, bringing the total tally to 94,190. The mortality rate in the UAE has increase by 0.2%.
• Farida Al Hosani, Director at the Department of Health – Abu Dhabi announced the UAE expects the Covid-19 vaccine to be widely available by late 2020 or early 2021, and strongly encourage the public to receive the flu jab to reduce pressure on hospitals during the winter.
• The Federal Authority for Identity and Citizenship (FAIC) has resumed issuing entry permits from the 24 September, except for work permits, in order to encourage the return of tourists and resumption of economic activities.
• The UAE continues to drive digital transformation with 81% of technologists in the country reporting that Covid-19 created the biggest technology pressure ever experienced in their organisations, and 86% stating that digital transformation projects have been approved within weeks which would typically take more than a year.

Stimulus and Economic Measures

• More than 300,000 people have benefited from the UAE Central Bank’s Targeted Economic Support Scheme (Tess) which aims to mitigate the impact of Covid-19 through an AED256 billion stimulus package, targeted at companies and individuals affected by movement restrictions and other precautionary measures.
• The UAE Cabinet approved a new law on the 25 September ensuring equal pay for men and women in the private sector.
• Sheikh Mohammed bin Rashid, UAE Prime Minister and Ruler of Dubai, has called for suggestions from the public to help shape the future of the country as he launched a project, Designing the next 50, for the next half-century.
• Dubai’s Jebel Ali Free Zone has signed a strategic partnership with an Israeli business group to support businesses and encourage economic cooperation following the normalisation of ties between the UAE and Israel.