How has the EU responded to the COVID-19 crisis and what is the impact on the Netherlands?
The outbreak of coronavirus in China at the end of 2019, and its spread across Europe and the rest of the world from February 2020 onwards, started out as a health crisis before evolving into a more general crisis touching on all segments of public life.
On 5 May 2023, the World Health Organization declared the corona pandemic to be over as a global health emergency.
The EU introduced a wide range of measures in response to the pandemic. These were in areas such as healthcare (by procuring vaccines) and the economy (in the form of stimulation packages). All designed to mitigate the impact of COVID-19. These measures included the Recovery and Resilience Facility of around €800 billion (at 2023 prices). Funding available under this facility is intended to promote reforms and investments in EU member states. The Netherlands is eligible for €5.4 billion for the period to the 2026 year-end. However, the EU measures also mean additional expenditure for the Netherlands.
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The EU introduced a wide range of measures – in various policy areas – to mitigate the impact of the corona crisis in the member states.
This page lists the main financial measures taken by the EU to support the healthcare system and the economy. For information on policy in general, we refer you to the COVID-19-sites launched by the European Commission and the European Council:
- The European Commission's response to the coronavirus crisis
- The EU’s emergency response to the COVID-19 pandemic
More in-depth information on:
- Financial measures taken by the EU to support the healthcare system and the economy
- EU measures providing economic support to member states
- NextGenerationEU and the Recovery and Resilience Facility
- EU measures to offer member states more financial flexibility
- Temporary relaxation of EU rules on state aid
Financial measures taken by the EU to support the healthcare sector
The EU has taken the following measures to support the healthcare sector:
- Acting on a proposal by the European Commission, the Council of the European Union and the European Parliament by agreeing to activate an Emergency Support Instrument (ESI). This allows the Commission, among other things, to free up resources for the rescEU initiative, which involves building up a strategic stock of vital medical equipment – and distributing it if necessary. The funding for the two instruments stands at just over €3 billion, a sum allocated from the EU budget. The EU member states together will be required to contribute an extra €3 billion to the EU budget.
- Approximately €1 billion has been released from the EU Horizon 2020 research and innovation fund to combat the COVID-19 pandemic and a further €152 million had been pledged.
- On behalf of the EU, the European Commission’s Joint Negotiation Team (consisting of the Commission, France, Germany, Italy, the Netherlands, Poland, Spain and Sweden) negotiated with vaccine developers and signed 6 procurement contracts in 2020 for nearly 2 billion doses. The Commission is providing about €2.7 billion in support from the Emergency Support Instrument. In total, the EU procured over 4.2 billion doses for EU member states and for countries outside of the EU by the end of 2022.
In addition to the above measures, the EU also supported the member states' healthcare sectors by issuing medical guidelines, and helped member states to obtain personal protective equipment for their healthcare workers.
More information:
- Proposal for a Council Regulation on the activation of emergency support in respect of the COVID-19 outbreak, European Commission (02-04-2020)
- Coronavirus research and innovation, European Commission
- EU Vaccines Strategy European Commission
- Ensuring the availability of supplies and equipment European Commission
Economic support for EU member states
On 9 April 2020, European finance ministers reached agreement on a €540 billion financial support package for countries hit most severely by the COVID-19 crisis. The package consists of the following components:
- €240 billion from the European Stability Mechanism (ESM) emergency fund. This component closed in 2022 and was not used by EU-member states;
- €200 billion in company credit froESM m the European Investment Bank (EIB), with over €23 billion of this being distributed in 2022;
- €100 billion for a new temporary instrument known as Support to mitigate Unemployment Risks in an Emergency (SURE). The final payment was on 14 December 2022. By the end of December 2022, a total of €98.4 billion had been disbursed to 19 member states.
More information:
- Repayments - Website ESM
- SURE - European Commission information about instrument SURE
- Financial support package COVID-19 - Netherlands Court of Audit
On 13 March 2020, the European Commission proposed a Corona Response Investment Initiative (CRII). A total of €37 billion in non-utilised resources from the European Structural and Investment (ESI) Funds will be used for COVID-19-related support for the healthcare sector, small and medium-sized enterprises (SMEs), vulnerable sectors and the labour market.
On 2 April 2020 this initiative was followed up by an additional CRII+ package. CRII and CRII+ are part of the Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU), for which €50.6 billion was available for 2021 until 2023 via the ESIF, to be applied for a green and digital economic recovery.
More information:
- Cohesion Policy and EU Solidarity Fund contribute to the Coronavirus Response Investment Initiative (CRII), European Commission (16-03-2020)
- Coronavirus Response Investment Initiative Plus: New actions to mobilise essential investments and resources (CRII+), European Commission (02-04-2020)
- The REACT-EU package, European Commission (11-01-2023)
NextGenerationEU and the Recovery and Resilience Fund
On 27 May 2020, the Commission presented a proposal for a €750 billion recovery fund known as NextGenerationEU in conjunction with a proposal for a new EU multiannual financial framework for 2021-2027.
The Commission will be allowed to borrow up to €750 billion on the capital markets, to be repaid between 2028 and 2058.
Agreement was reached on the Recovery and Resilience Facility on 18 December 2020. This facility is at the heart of NextGenerationEU. It will make €672.5 billion available in loans and grants to support reforms and investments in EU member states. To be eligible for support, member states draft a recovery plan setting out their planned investments and economic reforms. The reforms and investments must be completed by 31 December 2026.
All member states have submitted plans. The Netherlands submitted its plan on 8 July 2022 and was the last member state to do so. The European Commission approved the plan on 8 September 2022. The Netherlands accordingly became eligible for €4.7 billion in grants.
The plan was expanded in 2023 to include €735 million from REPowerEU. The latter is an EU plan that became available after Russia’s invasion of Ukraine and is to be used to bring an accelerated end to Europe’s reliance on Russian energy. The Netherlands submitted a modified recovery and resilience plan on 6 July 2023, with the Commission’s approval resulting in a total of €5.4 billion becoming available. The Commission issued a positive opinion on this modified plan on 29 September 2023. The Netherlands will submit its first payment request in spring 2024. The first part of the grant awarded will then be paid out after approval by the Commission.
At the end of 2023 the Commission has disbursed more than €119 billion in grants and over €56 billion in loans. The European Commission keeps information on how much money has been awarded to which member states and for what purpose on a scoreboard.
More information:
- Council of the EU Information about the NextGenerationEU recovery fund (PDF)
- Eerste concept Nederlands Herstel- en Veerkrachtplan naar Tweede Kamer - Press release Dutch Government regarding draft version Recovery and Resilience plan (28-03-2022) (Dutch only)
- NextGenerationEU: European Commission endorses the Netherlands' €4.7 billion recovery and resilience plan - Press release European Commission (09-09-2022)
- The Recovery and Resilience Facility - European Commission
- Recovery and Resilience Scoreboard - European Commission
Measures to offer EU member states more financial flexibility
The Stability and Growth Pact (SGP) sets limits on the member states' budget deficits (3% of GDP) and government debt (60% of GDP), and states how countries that deviate from these limits must set about achieving them.
Owing to the COVID-19 crisis and acting on a proposal from the European Commission dated 20 March 2020, the Council of the European Union and the European Parliament agreed to activate the SGP’s general escape clause. This allows EU member states to take all the financial measures that they feel are needed at a national level in order to kickstart the economy without violating the rules of the Stability and Growth Pact. On 8 May 2023, the European Commission decided to deactivate the general escape clause in 2024.
On 26 March 2020, the European Central Bank (ECB) launched its Pandemic Emergency Purchase Programme (PEPP), under which up to €750 billion worth of private and public sector securities could be purchased under the ECB’s responsibility. The initial purchase envelope was increased to a new total of €1,850 billion. Not only will the programme make it less expensive for member states to raise capital, but governments will also be able to support companies and households that have run into difficulties due to the COVID-19 crisis. The ECB deactivated the programme at the end of March 2022. By December 2023, more than €1,670 billion in member state government debt had been repurchased, including more than €84.5 billion in Dutch government debt.
More information:
- Proposal European Commission to activate the SGP’s general escape clause (PDF) (20-03-2020)
- Fiscal policy guidance for 2024: Promoting debt sustainability and sustainable and inclusive growth - Press release European Commission to deactivate general escape clause (08-03-2020)
- Pandemic emergency purchase programme (PEPP) - European Central Bank
Temporary relaxation of EU rules on state aid
In order to prevent unfair competition, EU regulations generally forbid governments from providing state aid to the corporate sector.
In exceptional cases, the European Commission may give its consent to the provision of state aid subject to certain stringent conditions. The European Commission considers the COVID-19 crisis to be an exceptional situation, and has a temporary policy to support the member states' economies. The policy is set out in the Temporary Framework for state aid measures to support the economy in the current COVID-19 outbreak. The Temporary Framework has since been amended on 6 occasions.
All EU member states had to ask the European Commission for permission to provide temporary state aid during the COVID-19 crisis. This temporarily state aid regime ended on 30 June 2022.
In the years to 2023, the European Commission has approved proposals for all EU member states in the context of the new, temporary state aid regime. According to the Commission, the total amount involved at year-end 2021 was already approximately €3.1 billion.
More information:
- The State Aid Temporary Framework, European Commission (19-03-2020)
- Amendements to the State Aid Temporary Framework
- EU-Gerecht: Covid-steun aan KLM onvoldoende gemotiveerd door de Europese Commissie - NPress-release Ministry of Foreign Affairs on annument EC-approval of state aid to KLM (02-06-2021) (Dutch only)
- Looking back at the State aid COVID Temporary Framework: the take-up of measures in the EU (PDF) - European Commission Competition State Aid brief (October 2022)
- Coronavirus Outbreak - List of Member State Measures approved under Articles 107(2)b, 107(3)b and 107(3)c TFEU and under the State Aid Temporary Framework (PDF) - European Commission Approved Measures under the temporary Staid AId Framework (5 May 2023)
EU measures to combat the COVID-19 crisis are also relevant to the Netherlands. They can be a source of income for the country and give it more financial scope for expenditure. They can also entail costs to the Netherlands, for example in the form of additional contributions to the EU or because the Netherlands, together with other member states, must guarantee expenditure at EU level. The impact of EU measures on the Netherlands is summarised in figure 1.
The relaxation of the rules in the Stability and Growth Pact in recent years allowed the Netherlands to increase its budget deficit and government debt above the levels that would otherwise apply. Thanks to the temporary framework for state aid, the Netherlands was also able to grant more state aid than would otherwise have been possible. The Netherlands made use of this opportunity to award some €27 billion in state aid in the period to 4 May 2023.
In line with the temporary framework for state aid, the European Commission gave approval on 22 April 2020 for a proposal by the Netherlands to provide up to €10 billion of liquidity support for Dutch businesses. On 13 July 2020 it also approved a Dutch proposal to grant loans totalling €3.4 billion to KLM. In May 2021, however, the Court of Justice of the EU ruled that the Commission had insufficiently substantiated its decision on this matter. After being instructed by the Court to reconsider its decision, the Commission once again gave approval, on 19 July 2021, for providing support to KLM
All the data on Dutch state aid to the 2021 year-end can be found on the Eurostat scoreboard.
More information:
- 16 lessons learned from previous government measures to support large companies, Netherlands Court of Audit report (26 June 2020)
- Individual support to companies during the corona crisis, Netherlands Court of Audit report (12 November 2020)
- Annexe 1 Costs and benefits, accompanying the web page, How has the EU responded to the COVID-19 crisis and what is the impact on the Netherlands? - Netherlands Court of Audit overview of costs and benefits of COVID-19 EU-measures
- Appendix 2 Reciept Netherlands from Horizon and state aid - Netherlands Court of Audit (07-12-2023)
- Measure to compensate organizers of sport events for their costs/ Sport sector/Direct grants/ €34 million (04-05-2023)
- Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak
- State aid: Commission approves Dutch plans to provide €3.4 billion in urgent liquidity support to KLM - Press release European Commission on approval of state aid for KLM (13-07-2020)
- State aid: Commission approves €1.5 billion Dutch scheme to compensate public transport companies for damages suffered due to coronavirus outbreak - Press release European Commission on approval of state aid for public transport (04-11-2020)
- State aid Scoreboard 2022, Eurostat (2022)
In recent years the European Court of Auditors has published various reports on the European measures taken in response to the corona pandemic, including a report on the CRII+ package, a report on REACT-EU and a report on the Recovery and Resilience Facility.
As well as issuing recommendations and publishing reports from the start of the pandemic, the Court of Auditors recently issued a series of reports on the Recovery and Resilience Facility. National supreme courts of audit in the member states also published reports on the corona crisis.
More information:
- Opinion No 3/2020 on amending EU regulation for the European Structural and Investments Funds’ use in response to the COVID-19 outbreak (2020)
- Opinion 4/2020 regarding the proposed REACT-EU regulation and Common Provisions Regulation governing the ESI funds (2020)
- Opinion No 6/2020 concerning the proposal for a regulation of the European Parliament and of the Council establishing a Recovery and Resilience Facility (2020)
Contact Committee
The EU Contact Committee’s website contains general information on COVID-related audits by other EU supreme audit institutions.
European Court of Auditors
- Special report 02/2023: Adapting cohesion policy rules to respond to COVID-19 (2023)
- Special report 07/2023: Design of the Commission’s control system for the RRF (2023)
- Review No 01/2021: The EU’s initial contribution to the public health response to COVID-19 (2021)
- Special report 01/2023: Tools facilitating travel within the EU during the COVID-19 pandemic (2023)
- Special report 13/2022: Free movement in the EU during the COVID-19 pandemic - Limited scrutiny of internal border controls, and uncoordinated actions by Member States (2022)
- Special Report 18/2022: EU institutions and COVID-19 – Responded rapidly, challenges still ahead to make the best of the crisis-led innovation and flexibility (2022)
- Special report 19/2022: EU COVID-19 vaccine procurement – Sufficient doses secured after initial challenges, but performance of the process not sufficiently assessed (2022)
- Special Report 15/2021: Air passenger rights during the COVID-19 pandemic: Key rights not protected despite Commission efforts (2021)
- Review No 06/2020: Risks, challenges and opportunities in the EU’s economic policy response to the COVID-19 crisis (2020)