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Worldwide policy response to COVID-19 in support of the CCS

CCS
COVID-19
Creative economy
Worldwide policy response to COVID-19 in support of the CCS
© Photo by Falco Negenman on Unsplash

 

We are more than panic buyers. Humankind is facing one of its biggest crisis. Governments will take decisions that are likely to shape our world for years to come. In addition to health and economic policies, cultural policies will play a crucial role if we wish to consolidate more cohesive and resilient societies in face of sanitary and environmental threats, societies which are empathic to other cultures. Such policies will be decisive in influencing the kind of world we wish to inhabit. Will they serve citizens’ empowerment and global solidarity? In answering this question, we need to think about the role of art and creation in shaping our common future. Why are art and culture so important to our lives? Not only because they remind us of the importance of freedom, of emotions and aesthetic experiences, but also because they embody pluralism of opinions, they help us deal with individual and collective memories, they provide a meaning and bring a sense of conviviality. All of these elements that prove helpful to fight excessive materialism, bureaucracy and individualism, to expose mechanisms of self-destruction, terror, injustice, domination and manipulation.

This article takes stock of existing short-term emergency measures to prevent the collapse of the culture and creative sectors (CCS) in Europe, its cultural institutions, artists and cultural workers who are in the forefront of social changes and community resilience. Cultural exchanges, expressions and participation keep the fabrics of a healthy society with trust and solidarity as a basis. They contribute to preserving our capacity to unleash the power of imagination to invent our future. We have to find a way to keep culture alive, to keep our human values alive, our sanity, our capacity to laugh, to tell stories and to create.

All over Europe there has been calls for solidarity from freelance musicians, concert halls and theatres to audiences to not ask for ticket refund with a view to ease the financial situation of artists and cultural institutions to overcome the coronavirus crisis. A large number of orchestras, music bands, performers, operas and music venues are making available live streaming of concerts and shows. For instance, each night the Budapest Festival Orchestra (BFO) gives a live chamber music concert called Quarantine soirées for online viewing, streamed from the BFO’s rehearsal studio. A large number of museums (Le Louvre, Rijksmuseum, Prado or the British Museum amongst others) are enabling free virtual tours. The Milan film library is giving free access to more than 500 films (which represents its entire catalogue).

Besides action taken by the cultural institutions and artists themselves, a number of policy response have emerged all over Europe. Those measures are evolving as the crisis unfolds. Herewith a summary of the policy responses adopted by 26 March 2020: measures taken at EU level and in several Member States.

 

Measures at EU Level

The EU institutions have put in place a series of measures to support the EU economy against the impact of the COVID-19 pandemic. These measures mostly target the SMEs and independent workers in the hard-hit sectors including CCS. There are several types of measures:

  1. Business support with liquidity via the existing EU financial instruments

EUR 1 billion will be made available from the EU budget as a guarantee to the European Investment Fund to support approximately EUR 8 billion of working capital and help at least 100,000 EU SMEs. This budget will boost the following EU financial instruments to help banks offer bridge financing to SMEs:

  • COSME Loan Guarantees
  • InnovFin SME Guarantees (under Horizon2020)
  • EU Fund for Strategic Investment

Nothing is however yet announced in relation to the Creative Europe Guarantee Facility, the specific vehicle to encourage banks to provide loans to CCS.

  1. Redirect EU budget resources to provide financial support to Member States (Coronavirus Response Investment Initiative)

This measure refers to the rapid mobilisation of cash reserves from the European Structural and Investment Funds (ESIF) – the EU Cohesion Policy main investment instrument – to provide liquidity to Member States’ budgets. This amounts to:

  • EUR 37 billion of yet unallocated Cohesion Policy funding from the 2014-2020 period to be redirected to support healthcare systems, SMEs, labour markets and other vulnerable parts of the economy;
  • The EU Globalisation Adjustment Fund could also be mobilised to support dismissed workers and the self-employed (the equivalent of EUR 179 million for 2020).
  1. Fiscal measures decided by the Council of the EU (through the Eurogroup)

EUR 188 billion package (representing around 1% of total EU GDP) will be made available for 2020 to cover governments spending or tax cuts. Member States are encouraged to design ample support measures in line with State aid rules, such as wage subsidies and suspension of payments of VAT and social contributions.

 

Measures at National Level

 

Germany

The German federal government is putting out a “solidarity fund” (Solidaritätsfonds) for self-employed and small businesses (up until 10 employees) for a total of EUR 40 billion breakdown into 10 billion as direct subsidies, 30 billion as loans for companies facing liquidity problems. This plan is eligible to artists.

  • Small businesses with up to five employees will receive a one-off payment of up to EUR 9,000 for three months.
  • SMEs with up to ten employees can apply to receive a one-time payment of up to EUR 15,000 for three months.
  • The Künstlersozialversicherung (KSK – artists’ social security) requests artists to declare an income forecast to the KSK. The social security contributions are adjusted to the changed circumstances.

In Berlin, the Senate decided on 19 March the establishment of the Sofort Paket II: a EUR 100 million grant program for micro and solo companies (up until 5 employees). EUR 5,000 subsidy are awarded to companies. In parallel the Sofort Paket I allows companies to access a bridging loan of up to EUR 500,000.

 

France

The French government set up general measures which provide delays for fiscal and social payments but also the setting up of a solidarity fund for micro businesses together with the speeding up tax returns from incentive schemes for all CCS (cinema, audiovisual, music, performing arts, video games).

Measures which are sector specific and managed by the relevant cultural agencies (CNC for audiovisual, CNM for music):

  • For the music sector, a support fund will be set up for the most vulnerable professionals and endowed by the National Music Centre (CNM) with a first envelope of EUR 10 million, which may be supplemented by external funding. The CNM will also suspend for March 2020 the collection of taxes on ticketing (the same for the CNC).
  • For the performing arts sector outside music, in particular the private theatre sector, emergency aid may be allocated, up to EUR 5 million, in order to respond to the difficulties with particular attention to maintaining employment.
  • For the book sector, an emergency plan with a first envelope of EUR 5 million is being implemented by the National Book Centre (CNL) to respond to the immediate difficulties of publishers, authors and booksellers.
  • Visual arts: a EUR 2 million fund created to finance art galleries, labelled art centres and artist-authors and operated by the National Centre for the Visual Arts (CNAP) and the DRACs (regional funding).

 

Italy

On 17 March the Italian government approved specific measures for CCS with the new EUR 25 billion package “Cura Italia” which aims to support the Italian economy in the context of the COVID-19 pandemic. This entails as main measures:

  • Extension of unemployment benefits to cultural workers and non-profit organisations;
  • EUR 600 allowance (for the month of March) for freelancers in the performing arts sector for a maximum of EUR 48.6 million in 2020;
  • Suspension of social security payments, welfare contributions and other levies and taxes (including VAT) for museums, theatres, concert venues and other cultural organisations;
  • Vouchers for reimbursement of tickets already sold (e.g. cinema, museums, theatres) valid for 1 year;
  • Establishment of two funds to support the audiovisual, cinema and performing arts sectors with overall budget of EUR 130 million in 2020 (EUR 80 million in current account and EUR 50 million capital account);
  • 10% of income from “private copy” levies collected by SIAE to support authors and performers.

 

The Netherlands

Broader measures as part of the emergency package Jobs & Economy include:

Temporary emergency measure to provide a bridge for work retention – Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud (NOW) aimed at employers to enable them to keep paying employees. Employers expected to have a loss of at least 20% can – now for 3 months (whereby it can be applied for a second time for another 3 months) – get 90% of the costs of salaries. This can only be received if employees are kept in employment.

With regard to freelancers (larger relevance for the cultural sector) there is a supplementary monthly payment (“aanvullende uitkering”) for the upkeep of livelihood (“levensonderhoud”). The livelihood payments – dependent on the composition of the family – can reach a maximum of EUR 1,500 net/ month. In terms of working capital, the maximum is EUR 10,157 as a cheap loan and a longer period to pay back.

There are also specific measures for the cultural sector: the Ministry for Education, Science and Culture is implementing measures for institutions that receive multi-year or project based cultural funding from one of the 6 National Dutch Cultural Funds (Rijkscultuurfondsen); whereby they, for example, do not have to pay back funds if already financed projects cannot continue. Additionally, the Ministry is in talks with local governments and private funds to add to this measure. A specific support package for the cultural sector – for both the short and long term – is currently being considered.

 

Belgium

Specific measures have been taken by regions to support CCS in addition to Federal State Measures:

The Brussels Region is providing that for all cultural events postponed during the year 2020, the subsidy obtained is maintained, for events that are cancelled the authorities allow the use of the subsidies to liquidate invoices due for expenses already incurred and that cannot be cancelled. In addition, for enterprises in the entertainment and sport sectors which had to close a unique prime of 4,000 Euro is granted, with a moratorium on the reimbursement of loans and accelerated disbursement of subsidies (in culture and events).

In Wallonia, measures are in place since 18 March 2020 for a period of 30 days:

  • EUR 233 million in support for SMEs and the self-employed in the sectors affected by the crisis;
  • A flat rate subsidy will be allocated to the businesses required to close during the containment period (around 48 900 potential beneficiaries);
  • The regional government will also make use of his three financial tools (SOWALFIN, SOGEPA & SRIW) in order to guarantee loans and grant loans for max EUR 200,000 for liquidity support;
  • EUR 2 million will be granted to municipalities which suspend taxes on businesses.

In Flanders current measures include:

  • Self-employed are entitled to the financial payment of the “bridging right” for the months of March and April 2020. Via the bridging right, the social rights as a self-employed person remain safeguarded.
  • Entrepreneurs affected by a complete closure can receive a one-off subsidy of EUR 4,000 euros.
  • Businesses and self-employed persons who have difficulties repaying their loans and credits will be deferred until 30 September. No additional costs are charged for this.

In relation to specific measures in the audiovisual sector, the European Film Agency Directors association (EFAD) has put together a list of measures taken by their members to mitigate the consequences of the COVID-19 outbreak.

 

Private initiatives

In addition to public policy measures, it is also important to highlight initiatives from the private sector (e.g. digital corporations, financial intermediaries).

Netflix announced on 20 March the setting up of a USD 100 million fund to support the creative community active in film production, mostly towards the workers on Netflix’s own productions in addition to the two-week pay Netflix committed for the cast and crew of its productions. USD 15 million is expected to go to third parties and non-profits providing emergency relief to out-of-work crew and cast.

On 25 March, Spotify pledged a USD 10 million fund to support artists hit by the pandemic as part of the initiative Covid-19 Music Relief.

SoundCloud – the music digital service for artists and musicians – announced 50% off of its premium subscription plan for independent music professionals worldwide during the Covid-19 crisis. It will also host online workshops for music professionals.

GrandFilm on Demand – an independent film streaming service in Germany – is sharing their VoD revenues with the independent cinemas who regularly stream their movies and which are now closed because of the Covid-19 outbreak.

Bandcamp – the US online music platform – waived its revenue shares (for 24h on 20 March) on artists’ profits from music and merchandise sales via the platform to redirect them to artists affected by COVID cancellation. According to the streaming platform fans spent USD 4.3 million with nearly 800,000 items sold on the platform (15 times more than average sale) in support of artists on Bandcamp.

MUBI – the independent UK film streaming platform – opened its library for three months for just £ 1 for users in quarantine.

In Romania, the bank Groupe Société Générale Romania donated RON 300,000 (EUR 70,000) for the independent cultural sector. Moreover, Groupe Société Générale and Fundatia 9 launched a call to other private financial intermediaries and foundations to join them in creating a solidarity network for artists and cultural spaces in Romania to mitigate the effects of the pandemic on the sector.

 

Key link:

KEA has set up an interactive map to track the COVID-19 policy responses for the cultural and creative sectors which will be regularly updated with contributions from users.

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