The Impact of COVID-19 on Europe

By European Committee of the Regions

Recently, the European Committee of the Regions released its annual regional and local barometer report.

Not surprising, it dealt with the impact of COVID-19 on Europe.

The executive summary provides a very useful overview on this question.

The executive summary follows:

With the European death toll from COVID-19 approaching 200 000 at the time of writing, the global pandemic is no doubt a crisis of historic proportions. Though unevenly, the whole of the European Union was affected by the pandemic, which upended priorities and became the overriding focus of public policy and public action at all levels. Nothing had prepared European regions and cities for this unprecedented crisis, yet, from February 2020, they had to face the pandemic and its deadly impact.

A differentiated impact at regional and local level

Many local and regional authorities have faced enormous challenges to maintain adequate health and care capacities to respond effectively to COVID-19. There were marked differences in death rates between regions depending not only on the circulation of the virus, but also on healthcare infrastructures, availability equipment and personnel, or the age structure of the population. Territories with more polluted air and vulnerable groups were also more exposed to the effects of the pandemic.

In order to fight the pandemic, EU Member States put in place lockdowns and other restrictive measures, which had considerable economic and social costs – albeit differentiated – throughout the EU. The most socially and economically hard-hit regions are those that were under strict lockdown measures for the longest period, not necessarily the ones with the highest death rates or the most cases detected. Most hard-hit regions are also the ones relying on economic sectors heavily affected by lock-down measures such as tourism, the cultural industry or with economic structures based on SMEs, self-employed people, other non-standard workers, and of course those highly dependent on international trade.

The crisis turned digital technologies into an imperative. Online solutions became essential for public authorities across EU regions and cities in fighting the pandemic and its consequences. This could bolster the ongoing digital transition but also risks exacerbating the “digital divide”, including between rural and urban areas, large and small companies, and digitally skilled workers and others. At the same time, an increased use of teleworking may cause demographic and economic shifts from the cities towards suburban or rural areas.

The differentiated impact of the crisis drew a new geography in the EU – a COVID-19 geography – distinct from the traditional dividing lines of urban/rural, centre/periphery or cohesion regions. It calls for a very careful assessment of regions’ needs for support and makes coordinated, tailored responses necessary.

Local and regional authorities on the front-line of the emergency

Cities, regions and villages have played a major role both through their own policy decisions and actions, and through the implementation of policies decided at higher levels of government.

They were quick to develop social support schemes to help people, with specific attention to vulnerable groups such as minorities, isolated people, the elderly, women, migrants, poor people, parents, students and they strove to ensure access to online schooling.

Cities and regions have also been playing an instrumental role in keeping local businesses afloat and safeguard employment. They implemented their own business support schemes, direct grants, lines of credit and guarantees, or supplemented the measures enacted at national level. Local and regional

authorities also often acted as information hubs about the crisis and related measures for businesses and individuals. They put in place soft mobility measures at a time where public transport was to be used sparsely and were the first to witness the rising demand for green space.

All these initiatives came at a price: While local and regional authorities’ expenditure increased due to the wide array of support schemes put in place, their revenue decreased, for instance due to local taxes suspension. This jeopardises their ability to deliver valuable public services, now and in the future.

Building back trust in national institutions and the European project

Contradicting decisions on health recommendations, persisting education inequalities, lack of coordination of lockdown measures between EU Member states, further impoverishment of vulnerable groups and rising insolvency of SMEs contributed to erode trust in national and European policies, and to feed populism. In comparison, trust in regional and local action remains higher, showing once more the importance of local democracy and the value of the work done by LRAs throughout this crisis.

Common strategies and better coordination with all key actors and at all levels, not least with regard to emergency management of healthcare facilities and care homes, and continued transnational and cross- border cooperation would have enabled a more robust and effective response to this crisis.

A public opinion survey commissioned by the CoR and carried out between 3 and 17 September 2020 on the views of 26 0000 citizens in all EU Member States on the coronavirus crisis and the role of regional and local authorities confirmed that more Europeans trust regional and local authorities (52%) than they trust the EU (47%) and their national government (43%). Regional or local authorities are also more trusted (48%) than the EU (45%) and national governments (44%) to take, now and in the future, the right measures to overcome the economic and social impact of the coronavirus crisis. More generally, two in three Europeans think that regional and local authorities do not have enough influence on the decisions taken at EU level and 58% – including a significant majority in all 27 Member States – think that more influence of regional and local authorities would have a positive impact on the EU’s ability to solve problems. The most mentioned policies for more influence would be preferred are those related to health (45%), employment and social affairs (43%), and education, training and culture (40%).

Preparing recovery and resilience

The pandemic is causing a massive recession. Its economic and social effects are particularly acute for vulnerable groups, with youth and women bearing a growing share of the costs. Career prospects are uncertain, some qualifications have become obsolete, and others require digital equipment. Brain drain and other associated demographic problems may also plague rural, peripheral and remote regions similarly to the 2008-2012 crisis. Businesses are also suffering with the end of support schemes, increased debt and the tightening of credit standards. Besides, the flexibility granted in state aid rules is likely to be distorting competition, since many Member States or regions severely hit are not in a fiscal position to make full use of it, which could lead to reinforced territorial disparities.

As Europe fights this historic recession, there is also a real risk that Europe’s sustainable, green and digital ambition will in practice be set aside. Member States may choose to focus emergency funding on pre- existing projects over ambitious and but more complex longer-term solutions. Moreover, the involvement of regional and local authorities in the governance of the EU Recovery Plan – in particular

its main component, the Recovery and Resilience Facility – is quite limited as currently designed, which means that those instruments are somewhat “spatially blind”. And the new measures to enhance the flexibility and accelerate the use of cohesion policy funding to respond to the coronavirus pandemic bear the risk of increased centralisation at Member State level.

On the other hand, the recovery measures and the new MFF are also opportunities to steer Europe more effectively towards its long-term goals: the twin digital and green transitions. To this end, building on fact-based analysis throughout this report, its conclusions and recommendations aims to guide policy makers at all levels to enable a sustainable recovery and a better future across all regions and cities. As an annual exercise, the Barometer will also monitor the evolution of the global trends and its impact on the future EU policies from a local and regional perspective.

The report can be found here:

Or read as an e-book below: