CEC REGIONAL UPDATE CEE COVID-19 OVERVIEW 29 MAY 2020
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CEC REGIONAL UPDATE
CEE COVID-19 OVERVIEW
29 MAY 2020Table of Contents BULGARIA ........................................................................................ Error! Bookmark not defined. CROATIA........................................................................................... Error! Bookmark not defined. CZECHIA ........................................................................................... Error! Bookmark not defined. HUNGARY......................................................................................... Error! Bookmark not defined. POLAND ............................................................................................ Error! Bookmark not defined. ROMANIA .......................................................................................... Error! Bookmark not defined. SLOVAKIA ......................................................................................... Error! Bookmark not defined.
BULGARIA
(prepared by the CEC Government Relations office in Sofia)
Status of epidemic:
• 2, 447 confirmed cases, 134 deceased (as of May 28)
Key economic indicators:
• For the first time since the beginning of the Covid-19 crisis in Bulgaria, the number of newly
employed persons is higher than those freshly registered at the employment offices. In the
week of May 18-24, a total of 8,028 people found jobs, while the newly unemployed persons
numbered 7,225, the National Statistical Institute reported. Since March 13, 39,076 people
have found jobs, with the peak of new appointments on May 22 with 1,600 persons started a
new employment.
• About 57.6% of businesses in Bulgaria’s non-financial sector saw their revenue from sales
of goods and service drop in April 2020 compared with March, the National Statistical Institute
(NSI) said on May 27.
Key issues:
• Bulgaria's state authorities have announced a new business grant scheme aimed at larger
companies. The minimum amount of grants will be BGN 30,000 (EUR 15,000) and the
maximum - BGN 100,000. (EUR 51 thousand). The amount will be 1% of the company's
annual turnover for 2019. A total of BGN 156 million (EUR 80 million) have been set aside
under the measure. The funds have been provided from the budget of the operational
programme Innovation and Competitiveness. The aid is targeted at companies that have not
benefited from other forms of support to retain their staff amidst the Covid-19 crisis.
• Bulgaria could receive a net worth of EUR 11.7 billion if the rescue plan proposed by the
European Commission President Ursula von der Leyen was approved. According to the plan,
the next EU budget should provide about 750 billion euros to stabilise European economies
after the coronavirus crisis. According to the document, Bulgaria will receive 15 billion euros
from this fund. At the same time, Bulgaria will have to contribute to the fund with 3.3 billion
euros.
• The proposal of GERB and the United Patriots to reduce VAT on restaurants, catering
services and books has been adopted at first reading by the National Assembly. From July 1
this year until the end of 2021, VAT on these services and goods will be 9%. Vouchers for
vacations at state-owned bases for medics, police officers and employees at the front line in
the fight against coronavirus are also planned. The changes are expected to be finally voted
on in the coming weeks.
• Representatives of the Commission for Protection of Competition have started an inspection
on the Bulgarian Oil and Gas Association for possible violations in the formation of fuel prices.
The inspection comes at the backdrop of the state's intention to set up its own oil company,
saying that this would lead to lower fuel prices at petrol stations.CROATIA
(prepared by CEC's Croatian partner - Vlahovic Group)
Status of epidemic:
• 2245 confirmed cases, 102 deceased (as of 28 May)
Key economic indicators:
• Minister of Finance Maric reported that the tax revenues in May until yesterday were halved
year-to-year, while the value of fiscalised accounts is about 18% lower compared to the same
period last year.
Key issues:
• "Croatia should be very satisfied with the economic recovery plan presented by the European
Commission,” PM Plenkovic said, adding that EUR 10 billion are planned for Croatia. This
should help in economic recovery in the next four years and is proof of how significant it is to
be a member of the EU. The new MFF proposal would be much better for Croatia than the
version from February. The PM underscored this achievement is made due to excellent
communication with the Commission, which resulted in the very generous allocation.
• As of today, Croatia fully opens its borders to the citizens of Slovenia, Hungary, Austria, the
Czech Republic, Slovakia, Estonia, Latvia, Lithuania, Poland and Germany who will no longer
have to state the reasons for entering Croatia, will undergo brief epidemiological control and
their entry into the country will be recorded as well as travel and contact details such as
destination, mobile phone number, and e-mail address for possible epidemiological reasons.
• The government's measures to shore up the economy will be extended as of 1 June just to
four sectors - tourism, catering, passenger transport, and the event management industry,
by respecting the criterion of a drop in income of more than 50%; medium and large
companies benefiting from these funds will be prohibited from paying out dividends and
profits until the end of 2021.CZECHIA
(prepared by the CEC Government Relations office in Prague)
Status of epidemic:
• 9 103 confirmed cases, 317 deceased (as of May 28)
Key economic indicators:
• Due to the Covid-19 pandemic and related government measures, around 25% of Czech
companies decided to lay off some of their workers. Further, 20% of firms lowered financial
bonuses for their employees. Only a quarter of businesses reported that they did not have to
limit their operations as a result of the pandemic.
Key issues:
• On May 19, the Government announced a new state guarantees programme "COVID III",
which should ease loans for companies in a total of CZK 500 billion (approx. EUR 18 billion).
The programme builds on the previous versions of COVID I and II programmes. However,
COVID III is specifically aimed at the self-employed and large companies with over 500
employees.
• The Czech Republic should get almost EUR 20 billion from the European Commission’s
special recovery fund to restart economies hit hard by the coronavirus outbreak. Out of the
amount, direct payments from EU funds should reach 8.6 billion, and the remaining 10.6
billion would be loans with favourable interest rates.
• On May 19, Prime Ministers of the Visegrad Group and Germany held a video conference.
The Visegrad group (Poland, Czechia, Slovakia and Hungary) discussed together with
Angela Merkel the possibility of easing border controls, which would eventually lead to
smoother inter-state communication. The first “pandemic” summit of the V4 also aimed at
discussing the V4 position towards the Multiannual Financial Framework of the EU. The V4
demands more significant funding for the European cohesion fund with more flexibility of
money appropriation.
• Deputy Health Minister Roman Prymula, who headed of the country’s Central Crisis Staff in
the initial phase of the COVID-19 crisis in March is to serve as Government Commissioner
for Research in Health Sciences. He was approved for the post by the cabinet on Monday.
His departure is linked to past conflicts with Health Minister Adam Vojtech.HUNGARY
(prepared by the CEC Government Relations office in Budapest)
Coronavirus updates
• 1311 confirmed cases, 509 deceased (as of 28 May)
Key economic factors
• The 2021 budget was submitted to Parliament on May 26th. One of the main pillars of next
year's budget is the HUF 3 trillion health insurance and epidemic prevention fund, which also
provides for significant healthcare expenditures. In addition to maintaining epidemiological
preparedness, the 2021 budget includes support for families raising children, protects
retirees, and preserves security. The other central pillar of the 2021 budget is the HUF
2.5 billion financial protection fund, which raises funds for the protection and re-creation of
jobs. It provides cover for investment support, road development, maintenance, or innovation
support. It also includes expenditures of the National Employment Service for employment
programs.
Key issues
• The government submitted bills to the Parliament on 26 May, which would end the
emergency situation caused by the coronavirus epidemic and end the special legal period.
Of the two bills, one repeals the Coronavirus Control Act and the elimination of the
emergency situation, and the other contains related transitional rules. The Parliament will
make a decision on this within two weeks, so that the emergency situation and the special
legal order may end in mid-June.
• The Operational Staff will maintain and manage preparations for a possible second wave of
the epidemic, with the extension of health insurance and family support benefits until July
1st.
• The moratorium on loan repayment will remain in effect until December 31, and the hospital
command system will be maintained.
• As of 27 May, Czechs, Slovaks and Hungarians can cross each other’s borders without
quarantine if they do not stay in the other country for more than 48 hours. Hungarian citizens
can enter Hungary from Austria if they have stayed in the Czech Republic for less than 48
hours. The regulations applicable to Hungarian citizens also apply to citizens of the European
Economic Area, who are entitled to permanent residence and certify this with a permanent
residence card.
• PM Viktor Orban and other V4 heads held a joint video conference with German Chancellor
Angela Merkel. Measures to stop the epidemic was a hot topic. It was agreed that Europe’s
healthcare services would have to be much better prepared to manage the second wave of
the epidemic expected in the autumn. All agreed that the gradual withdrawal of control and
restrictions of border crossings is in the interest of all five countries. They discussed methods
to repair the economic damage caused by the coronavirus pandemic. They agreed on
continuing close cooperation with respect to the ongoing negotiations on the EU’s
multiannual financial framework and restart of the EU economy. Merkel also presented the
main points of the German-French initiation to be launched for stimulating the economy after
the epidemic. The German Chancellor intends to get the V4’s support for the initiation. The
next Visegrad summit will be held in the Czech Republic in early June.POLAND
(prepared by the CEC Government Relations office in Warsaw)
Status of epidemic:
• 22,852 confirmed cases, 1,038 deceased (as of 28 May)
Key issues:
• PM Morawiecki and Health Minister Łukasz Szumowski announced that the government will
proceed to the fourth stage of easing restrictions. The fourth stage will be implemented in
two steps as of 30th May and 6th June. Government representatives underlined that a step
back – a return of restrictions – is possible if there is an infection spike. While restrictions on
the economy will be eased, most social distancing rules will remain unchanged.
Stage IV – 30.05 Stage IV – 06.06
• Opening of tattoo and massage
• No masks required in open air public
places e.g. streets, parks. Social parlours.
• Opening of gyms.
distancing rules must be kept.
• Opening of cinemas and theatres
• No customer limits in shops,
restaurants, cafes and bars. under a new sanitary regime (50% of
• No limits in places of worship. audience allowed and masks
• Public gatherings outside up to 150 required).
• Family gatherings up to 150 persons
persons (e.g. protests, concerts) will
be able to take place. Special will be allowed such as weddings. Also
inside and without masks.
conditions will apply, and some types
• Social distancing rules remain in
of events will have to receive permits
from epidemiological officials. place.
• The Polish government appears to be content with the EC's recovery plan. Poland will be one
of the primary beneficiaries of the recovery budget - approximately EUR 64 billion will be
allocated to Poland. Agriculture Commissioner Janusz Wojciechowski also underlined that
the new Multiannual Financial Framework proposal provides Poland with an additional EUR
24 billion for agriculture than previously assumed. During a press conference, PM Morawiecki
boasted that the EC's proposal is a success of the Polish government. Most importantly,
Poland's appeal for a substantial recovery budget - a new Marshal Plan - was understood
and supported by the EC and other EU states, proving Poland's growing influence in the bloc.
PM Morawiecki further underlined that the European Commission accommodated Poland's
asks. He specifically highlighted the enlarged Just Transition Fund and additional funds for
cohesion and agriculture.
• Works in the Senate on the new election law have been prolonged by the opposition –
especially PSL and Left senators. These parties are hoping to postpone the election until
October. A new legal interpretation appeared among some opposition politicians that it would
be illegal to organise a vote before the presidential term finishes on August 6thbecause the
constitutional deadline for the election has already passed. The ruling PiS party is adamant
that the last possible day for the first round of the voting is June 28th. The leadership of the
United Right – Jarosław Kaczyński, Zbigniew Ziobro, and Jarosław Gowin – made a joint
statement to avoid speculation on possible tensions. The PO is split on the election with some
hoping for a postponement and some arguing that Trzaskowski’s momentum will allow him
to win in the second round with Duda in early July.ROMANIA
(prepared by CEC's Romanian partner - Serban & Musneci Associates)
Status of epidemic
• 18,791 confirmed cases; 1,219 deceased (as of 28 May)
Key economic indicators
• Number of jobs suspended: 595,672 (167,073 manufacturing industry; 93,814 retail, repair
shops; 99,182 hospitality).
• Number of jobs terminated: 429.585 (75,848 retail, repair shops; 76,543 manufacturing
industry; 64,573 constructions).
Key issues:
• On May 28, President Klaus Iohannis announced a second phase of easing COVID-19
restrictions. While several social activities will be resumed, President Iohannis warned that
Romania still records around 200 new cases daily, and 200 Romanians are still treated in
ICUs, advising to ‘proceed with care’. As of June 1st, terraces, beaches and open-air shows
and athletic competitions are allowed. Also on June 1st, land transport resumes at its full
capacity, but not air travel. Another phase of relaxation is expected to take place on June 15.
The seaside tourist season might start on June 15, announced on Thursday the Minister of
Economy, Virgil Popescu. The Minister of Health announced that the terraces could be
opened from June 1. Their owners will have to follow a series of strict rules. Meanwhile, the
head of the Department for Emergency Situations (DSU), Raed Arafat, stated on Wednesday
evening, that it is difficult to predict a date for the reopening of malls and does not know if
they would also open on June 1.
• The government is to approve in Thursday's meeting a draft emergency ordinance
establishing active support measures for employees and employers in the context of the
epidemiological situation caused by the spread of the SARS-CoV-2 coronavirus. The budget
would support 45% of the base salary (but no more than 45% of the gross average salary)
for three months for employees returning from technical unemployment, while employers
would have to keep the employment relationship for 6 months after the 3 months supported
from the budget end.
• The reopening of gambling activities will be possible in certain health conditions and
depending on the evolution of the epidemiological crisis, said Prime Minister Ludovic Orban,
after discussions with representatives of the gambling industry. Ludovic Orban had these
discussions in the context of the measures that the Government will continue to take to limit
the economic and social effects of the coronavirus crisis, the Government said.
• Four months into 2020, the deficit of the general consolidated budget has increased to
2.48% of the GDP to 26.82 billion lei, more than half of it due to the fiscal facilities granted to
fight the effects of the COVID-19 epidemic, the Finance Ministry informs.
• Romanian managers estimate for the next three months there will be a relative stability of
activity in construction and retail trade, a moderate decrease in the number of employees in
construction, retail trade and services, as well as price hikes, according to the findings of a
trend survey published on Thursday by the National Institute of Statistics (INS).SLOVAKIA
(prepared by the CEC Government Relations office in Bratislava)
Status of epidemic:
• 1,520 confirmed cases, 28 deceased (as of 28 May)
Key economic indicators:
• According to the survey of the National Bank of Slovakia, the GDP will contract by 8.3% this
year; the unemployment rate is expected to reach 8.5% at the end of 2020
Key issues:
• According to newly adopted rules, indoor establishments can choose between 1 person per
15 square meters or 2 meters distance between customers (e.g. in case of restaurants).
Moreover, restaurants can remain open after 22:00 in case of closed groups (obligation to
keep the list of people present). In addition, sanitary disinfection day on Sunday no longer
applies to e.g. cinemas, theatres or taxi services. Further measures should be announced on
1 June, including the opening of indoor sports grounds, fitness centres and indoor swimming
pools is expected.
• The decision was reached that stays in the Czech Republic, Poland, Hungary, Austria,
Croatia, Germany, Switzerland, Slovenia for less than 48 hours will not be subject to COVID-
19 test and quarantine upon return. Moreover, Slovakia reached bilateral agreements with
the Czech Republic and Hungary that they will not require COVID-19 test or quarantine from
Slovak citizens travelling to their countries for 48 hours either. Moreover, hundreds of Slovak
citizens have already gone into smart home quarantine.
• The government agreed to provide extraordinary state guarantees in the amount of
EUR 173.5 million for loans from the new European Union program SURE. The provision of
state guarantees is a condition for Slovakia to be able to draw funds from this program, which
will be able to partially cover the increased public expenditures of EU member states on the
Kurzarbeit scheme (part-time work with wage compensation) for employees. Countries will
also be able to use the funds for similar programs for self-employed, as well as to cover the
costs of some health-related measures resulting from the COVID-19 pandemic. The Draft
Act will be passed in Parliament in an accelerated legislative procedure.
• International passenger air transport to Slovakia can resume with certain restrictions as of 29
May. In the first phase, irregular charter commercial flights with capacity for up to 20
passengers for Slovak citizens could be allowed. Flights could be operated between the
Slovak Republic and Hungary, Poland, the Czech Republic, Austria, Slovenia, Croatia,
Germany or Switzerland. The opening of cross-border passenger transport including rail, bus,
and shipping is not yet foreseen.You can also read
