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EU law in the time of COVID-19

Better regulation / DISCUSSION PAPER
David Edward , Robert Lane , Leandro Mancano

Date: 04/09/2020
The COVID-19 emergency has caused unprecedented legal challenges to the EU institutions and the member states across a wide spectrum of areas. The measures put in place to coordinate the immediate cross-border response to the outbreak are unlikely to lead to contentious legal problems. However, the Council, and especially the Commission, being also able to react to measures taken by member states, companies or firms, could prove to be potentially more intrusive.

This paper deals with the powers governing the EU’s public health response to the COVID-19 outbreak and analyses the legal implications of actions taken by member states, companies and firms to mitigate the economic fallout of the lockdown and restrictions put in place to stop the spread of the virus. It finds that:

  • the powers of the EU institutions in the field of public health are limited. The legislature has made the most of its powers by adopting a wide range of measures, while in some cases finding the source of the power to act in the rules governing the functioning of the internal market;
  • within those limits, the Commission has adopted extensive guidelines to coordinate member states’ efforts during the pandemic across and beyond matters related to the internal market;
  • within its competences, the EU has sought to unleash financial support to foster solidarity between member states;
  • part of the EU’s response has consisted in relaxing existing rules, particularly in relation to free movement and competition law;
  • as the threat of the virus (hopefully) diminishes, the EU institutions will have to monitor national governments’ use of ‘public health’ as a justification for derogations from EU law. Invoking emergency powers may, in particular, have serious implications for the preservation of the rule of law;
  • member states are encouraging firms to work together— for example, on the distribution of vital products and services and research—notwithstanding the highly developed rules of EU competition law that prohibit sharing markets and know-how;
  • both the Commission and national competition authorities assure firms that cooperation is permissible because ‘there are good reasons for it’, but they don’t explain how these ‘good reasons’ justify departure from the rules of a system that is notoriously resistant to justification;
  • the penalties for transgression of the rules can be very high; promises from the administrative authorities to look benignly on collaboration cannot guarantee immunity, both because their promises lack reliable certainty and because they alone do not enforce the rules: competitors and consumers do so through the courts.
  • EU rules on mergers and takeovers may be put to the test in the aftermath of the pandemic;
  • the unprecedented sums already being spent and promised for the future rebuilding of economies put the procedural and substantive EU rules on state aid under serious strain and threaten to destabilize the level playing field they are meant to protect.

Read the full paper here.
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