On 7 April, EBC Vice-President Philip van Nieuwenhuizen participated with other construction stakeholders in a video conference call with EU Internal Market Commissioner to discuss about the impact of the COVID-19 outbreak on the construction sector.
During the call, participants reiterated the commitment of the construction sector to support public authorities and their dedication to workers’ well-being in this complex period. Moreover, they recalled the main principles of the joint “Declaration of the European Construction sector on COVID-19” which calls upon the European institutions and Member States to act in full coordination to support the sector to:
– Ensure health of its workers
– Mantain economic activity
– Accelerate the recovery
Vice-President Philip van Nieuwenhuizen expressed concerns on the current economic situation that could have extremely damaging and long-term effects. The current situation has the potential of exhausting companies’ cash flow and cripple the construction value-chain for years to come, crushing the millions of SMEs which are the driving force of the sector. For this reason, he urged the European Commission to ensure:
- A “Marshall Plan” for green buildings and infrastructure: given the cyclical nature of construction works, the real impact on the sector will only be felt in the near future because there is today no/little public or private demand for future construction works. Thus, it is crucial to immediately build-up a massive financial programme to support a large-scale sustainable renovation of the building stock and the maintenance of critical infrastructure, both crucial to meet EU sustainability goals. However, this programme cannot be based only on financial instruments – already available on the financial market at low (or negative) interests and not sufficiently taken up – but should also include direct grants as a trigger for renovation and maintenance. Thus, a new ambitious Multi-Annual Financial Framework should treat pooling grants and loans for green buildings and infrastructure as a priority pillar for an EU green economic recovery.
- A performing supply chain: essential and non-essential construction activities cannot be delivered if a piece of the supply chain stops working. It is then crucial that the European Commission monitors the functioning of the EU construction supply and supports the circulation of construction products, equipment and provision of services in full respect of the instructions delivered by public health authorities.
- Sector-specific liquidity: profit margins in the construction sector are very low meaning that a few weeks of inactivity could lead many construction SMEs into bankruptcy. Thus, it is crucial that all liquidity injections programmes include the construction sector as a priority.
Commissioner Thierry Breton welcomed these proposals and ensured his commitment to support the construction sector, and its SMEs, to get through the crisis through support initiatives and a continuous dialogue.
