Schmit: Recovery fund key to get hospitality sector back on its feet

According to Commissioner Nicola Schmit, member states were quick to put in place short-time work schemes to preserve jobs and protect workers’ income. "Though now we need to prepare for the post-Covid recovery," he added. [EC/KOBUS]

Placing the hospitality and tourism sectors at the heart of national recovery and resilience plans will be essential, the EU commissioner for jobs and social rights, Nicolas Schmit, told EURACTIV.

The hospitality sector was hit extremely hard by the coronavirus crisis. Most bars, restaurants and cafés are small or micro-businesses, which were particularly exposed to lockdown measures imposed across Europe to contain the spread of the virus.

However, many businesses in the sector have also been quick to innovate in finding solutions that allow them to provide a takeaway or delivery service, said the EU commissioner from Luxembourg.

“Of course, we all look forward to a time when we can visit our favourite café or restaurant and enjoy time with family and friends over a meal or drink, as we did before the pandemic hit,” he said.

In this regard, Schmit added that EU countries have been encouraged to involve the hospitality sectors in the design, implementation and monitoring of economic recovery plans.

These plans are intended to put in place the historic “Next Generation EU” programme, a €750-billion stimulus package approved by the European Council in December to help the economy recover from the disruption caused by the pandemic.

“It is the Recovery and Resilience Facility – the centrepiece of NGEU  – that will do the lion’s share in getting Europe back on its feet,” the Commissioner commented

EU member states are currently in the process of preparing these plans, focusing on reforms and investments that are expected to generate a lasting impact.

However, the Commission does not have a sector-specific approach when it comes to recovery plans.

“Our objective is to rebuild the economy in an inclusive and sustainable way that is fit for the green and digital age,” he said, adding that the Commission relies on expert advice given by the World Health Organisation and the European Centre for Disease Control “to inform national authorities in making the right choices when it comes to reopening the sector”.

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Preparing for the post-COVID world

Schmit praised EU countries for quickly putting in place temporary support schemes aimed at preserving jobs and protecting workers’ income, as well as other measures to ensure businesses have continued access to liquidity.

The EU’s temporary initiative to mitigate unemployment risks in an emergency, called SURE, has provided a lifeline to member states in financing these measures, providing €100 billion in the form of loans to prevent companies from laying off staff.

“Now, we need to prepare for the post-COVID recovery,” Schmit added.

In terms of EU financial support, the European Social Fund is available to finance short-time work schemes, job creation and training measures, while, in the short-term, the REACT-EU scheme is providing additional money for 2021 and 2022.

“But we must also accept that some businesses and sectors will not look the same as they did before the crisis,” he cautioned, adding that the EU executive has brought forward several initiatives under the EU’s skills agenda to support countries in this transition.

Through these initiatives, governments can ease the transition into new jobs by supporting training, help with job-search or provide well-designed and temporary hiring subsidies on top of social protection for all workers.

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Despite the challenges the pandemic has presented to the EU hospitality sector, hopes remain high that it can bounce back and adapt to a new post-pandemic reality, but this requires support “commensurate to the hit it has taken”, according to the EU hospitality association.

Reactions

But for the Italian MEP Paolo Borchia, who was the Parliament’s rapporteur on the EU strategy for small and medium-sized enterprises (SMEs), the EU must also be realistic in its expectations about the recovery plan.

“The hospitality sector has already expressed fears concerning the actual accessibility of this instrument, especially when it comes to smaller businesses, as well as scepticism about the actual amounts that will be made available,” he said.

The sector expects to use these funds to invest in digital tools for SMEs, which helped many businesses stay afloat during the pandemic.

“It is true that there are a lot of funds available but getting access to these programmes for recovery is very challenging if not sometimes impossible, as our sector is made up of really micro-companies,” said Marie Audren, director-general of HOTREC, the European umbrella association of hotels, restaurants and cafes.

According to the MEP Borchia, success also depends on the ability of national governments to draft and implement plans effectively. The Commission, she warned, is committed to set strict reform conditions for the approval of national plans that will open the door to EU funds.

“Such strong conditionality casts further doubts over the actual overall impact of the recovery plan. And, needless to say, bars and restaurants that have already been closed for months can no longer afford to wait any further,” he said.

[Edited by Frédéric Simon]

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