A message from Kristalina Georgieva, IMF Managing Director | April 9, 2020
Introduction: A Crisis Like No Other
I want to begin by wishing my personal best to everyone—for you and your families’ health and safety during these difficult times.
Today we are confronted with a crisis like no other. Covid-19 has disrupted our social and economic order at lightning speed and on a scale that we have not seen in living memory. The virus is causing tragic loss of life, and the lockdown needed to fight it has affected billions of people. What was normal just a few weeks ago—going to school, going to work, being with family and friends—is now a huge risk.
I have no doubt that we will overcome this challenge. Our doctors and nurses are fighting it around the clock, often risking their lives to save the lives of others. Our scientists will come up with solutions to break COVID-19’s grip. Between now and then, we must marshal the determination of all—individuals, governments, businesses, community leaders, international organizations—to act decisively and act together, to protect lives and livelihoods. These are the times for which the IMF was created—we are here to deploy the strength of the global community, so we can help shield the most vulnerable people and revitalize the economy.
The actions we take now will determine the speed and strength of our recovery. That will be the focus of the IMF’s 189 member countries when we meet in our virtual Spring Meetings next week.
It is what I will concentrate on today.
Where We Stand: the Status of the Global Economy
First, let’s look at where we stand. We are still faced with extraordinary uncertainty about the depth and duration of this crisis.
It is already clear, however, that global growth will turn sharply negative in 2020, as you will see in our World Economic Outlook next week. In fact, we anticipate the worst economic fallout since the Great Depression.
Just three months ago, we expected positive per capita income growth in over 160 of our member countries in 2020. Today, that number has been turned on its head: we now project that over 170 countries will experience negative per capita income growth this year.
The bleak outlook applies to advanced and developing economies alike. This crisis knows no boundaries. Everybody hurts.
Given the necessary containment measures to slow the spread of the virus, the world economy is taking a substantial hit. This is especially true for retail, hospitality, transport, and tourism. In most countries, the majority of workers are either self-employed or employed by small and medium-sized enterprises. These businesses and workers are especially exposed.
And just as the health crisis hits vulnerable people hardest, the economic crisis is expected to hit vulnerable countries hardest.
Emerging markets and low-income nations—across Africa, Latin America, and much of Asia—are at high risk. With weaker health systems to begin with, many face the dreadful challenge of fighting the virus in densely populated cities and poverty-stricken slums—where social distancing is hardly an option. With fewer resources to begin with, they are dangerously exposed to the ongoing demand and supply shocks, drastic tightening in financial conditions, and some may face an unsustainable debt burden.
They are also exposed to massive external pressure.
In the last two months, portfolio outflows from emerging markets were about $100 billion—more than three times larger than for the same period of the global financial crisis. Commodity exporters are taking a double blow from the collapse in commodity prices. And remittances—the lifeblood of so many poor people—are expected to dwindle.
We estimate the gross external financing needs for emerging market and developing countries to be in the trillions of dollars, and they can cover only a portion of that on their own, leaving residual gaps in the hundreds of billions of dollars. They urgently need help.
The encouraging news is that all governments have sprung into action and, indeed, there has been significant coordination. Our Fiscal Monitor next week will show that countries around the world have taken fiscal actions amounting to about $8 trillion. In addition, there have been massive monetary measures from the G20 and others.
Many of the poorer nations are also taking bold fiscal and monetary action, even as they grapple with this fundamental shock to their systems—and with far less firepower than their rich-country counterparts.
So this is a snapshot of where the global economy stands today.
There is no question that 2020 will be exceptionally difficult. If the pandemic fades in the second half of the year—thus allowing a gradual lifting of containment measures and reopening of the economy—our baseline assumption is for a partial recovery in 2021. But again, I stress there is tremendous uncertainty around the outlook: it could get worse depending on many variable factors, including the duration of the pandemic.
And crucially, everything depends on the policy actions we take now.
What Needs to be Done: a 4-Point Plan
My next point is about building the bridge to recovery. We see four priorities:
• First, continue with essential containment measures and support for health systems. Some say there is a trade-off between saving lives and saving livelihoods. I say it is a false dilemma. Given this is a pandemic crisis, defeating the virus and defending people’s health are necessary for economic recovery. So the message is clear: prioritize health spending for testing and medical equipment; pay doctors and nurses; make sure hospitals and makeshift clinics can function. For many countries—particularly in the emerging and developing world—this means carefully reallocating limited public resources. It also means increasing the flow of resources to these countries. That includes the flow of vital goods: we must minimize disruptions to supply chains and, with immediate effect, refrain from export controls on medical supplies and food.
• Second, shield affected people and firms with large, timely, targeted fiscal and financial sector measures. This varies according to country circumstances, but it includes tax deferrals, wage subsidies and cash transfers to the most vulnerable; extending unemployment insurance and social assistance; and temporarily adjusting credit guarantees and loan terms. Some of these measures have been taken in the first wave of policy support. Many countries are already working on a second wave. Lifelines for households and businesses are imperative. We need to prevent liquidity pressures from turning into solvency problems and avoid a scarring of the economy that would make the recovery so much more difficult.
• Third, reduce stress to the financial system and avoid contagion. Our upcoming Global Financial Stability Report will analyze the range of vulnerabilities in the financial sector. Banks have built up more capital and liquidity over the past decade, and their resilience will be tested in this rapidly changing environment. The financial system is facing significant pressures, and monetary stimulus and liquidity facilities play an indispensable role. Interest rates have been lowered in many countries. Major central banks have activated swap lines and created new ones to reduce financial market stress. Enhancing liquidity for a broader range of emerging economies would provide further relief. Importantly, it would also lift confidence.
• Fourth, even as we move through this containment phase, we must plan for recovery. Again, we must minimize the potential scarring effects of the crisis through policy action now. This requires careful consideration of when to gradually ease restrictions, based on clear evidence that the epidemic is retreating. As measures to stabilize the economy take hold and business starts to normalize, we will need to move swiftly to boost demand. Coordinated fiscal stimulus will be essential. Where inflation remains low and well-anchored, monetary policy should remain accommodative. Those with greater resources and policy space will need to do more; others, with limited resources will need more support.
The IMF: All Hands on Deck
This leads me to the role of the IMF.
We are working 24/7 to support our member countries—with policy advice, technical assistance and financial resources:
• We have $1 trillion in lending capacity and are placing it at the service of our membership.
• We are responding to an unprecedented number of calls for emergency financing—from over 90 countries so far. Our Executive Board has just agreed to double access to our emergency facilities, which will allow us to meet the expected demand of about $100 billion in financing. Lending programs have already been approved at record speed—including for the Kyrgyz Republic, Rwanda, Madagascar, and Togo—with many more to come.
• We are reviewing our tool kit to see how we might better use precautionary credit lines to encourage additional liquidity support, establish a short-term liquidity line, and help meet countries’ financing needs via other options—including the use of SDRs. And where we might be unable to lend because a country’s debt is unsustainable, we will look for solutions that can unlock critical financing.
• We have revamped our Catastrophe Containment and Relief Trust to provide immediate debt relief to low-income countries affected by the crisis, thereby creating space for spending on urgent health needs rather than debt repayment. We are now working with donors to increase the CCRT to $1.4 billion to extend the duration of the debt relief.• And together with the World Bank, we are calling for a standstill of debt service to official bilateral creditors for the world’s poorest countries.
I am proud of the staff of the IMF for stepping up in this crisis. And I look forward to the discussions during the Spring Meetings next week on what more we can do.
Conclusion: A Test of Our Humanity
Let me conclude with a line from Victor Hugo who once said: “Great perils have this beauty, that they bring to light the fraternity of strangers”.
It is this common threat that brings us all together, to harness the greatest strengths of our humanity—solidarity, courage, creativity, and compassion. We don’t know yet how our economies and way of life will change, but we do know we will come out of this crisis more resilient.
Thank you very much.
Compliments of the International Monetary Fund.

April 8, 2020
Today, the European Commission and the High Representative set out plans for a robust and targeted EU response to support partner countries’ efforts in tackling the coronavirus pandemic. The EU’s collective action will focus on addressing the immediate health crisis and resulting humanitarian needs, strengthening partner countries’ health, water and sanitation systems and their research and preparedness capacities to deal with the pandemic, as well as mitigating the socioeconomic impact. To underpin these actions, the EU will secure financial support to partner countries amounting to more than €15.6 billion from existing external action resources. Together with our partners, we are making sure that the substantial EU funding already allocated to them is targeted to help them deal with the impact of coronavirus.
The President of the European Commission, Ursula von der Leyen, commented: “The virus knows no borders. This global challenge needs strong international cooperation. The European Union is working tirelessly to fight the pandemic. We all know that only together we can stop the worldwide spread of the coronavirus. To that end, the EU will soon convene a virtual pledging event to help mobilise the necessary funding and support the World Health Organisation to assist the most vulnerable countries.”
High Representative/Vice-President Josep Borrell, added: “The coronavirus pandemic requires united, global action in response. The European Union and its Member States are playing their part in tackling this health crisis and its severe consequences – at home and abroad. While we are doing everything we can to provide support of our citizens, we also need to assist our partners in our direct neighbourhood and beyond to address the impact it will have on their livelihoods, stability and security, as their problems are our problems. This is a global fight that we will either win or lose together. Cooperation and joint efforts at the international level and multilateral solutions are the way forward, for a true global agenda for the future.”
Commissioner for International Partnerships, Jutta Urpilainen, explained: ”As long as the coronavirus threatens lives somewhere, we are not safe. This is the core of international cooperation and partnerships. We need to work together in order to tackle our shared challenges. Today the European Commission steps up and leads with this significant global response package of more than €15.6billion the joint work with our partners, particularly in Africa, for a safer future for us all.”
Neighbourhood and Enlargement Commissioner, Olivér Várhelyi, said: “As part of our global response to the coronavirus pandemic we are redirecting over €3.8 billion of foreseen funds for the Western Balkans and our immediate neighbours to the East and to the South, to where their real needs are today: for urgent response to the health crisis, to strengthen the health systems and to mitigate the socio-economic impact of the pandemic. We share a continent and we can only succeed together.”
Janez Lenarčič, Commissioner for Crisis Management, warned: “We are facing what could become the biggest humanitarian crisis in decades. The impact of the coronavirus outbreak on the most fragile countries, migrants and the most vulnerable people is likely to be dramatic. This is particularly the case in the confined and often insalubrious setting of refugee and internally displaced people camps. That is why we need to respond vigorously to the public health emergency, make sure humanitarian actors continue to have access to carry out their life-saving assistance and support transport and logistic for key humanitarian operations.”
Team Europe package
The EU’s response follows a ‘Team Europe‘ approach, aimed at saving lives by providing quick and targeted support to our partners to face this pandemic. It combines resources from the EU, its Member States and financial institutions, in particular the European Investment Bank and the European Bank for Reconstruction and Development, to support partner countries and address their short-term needs, as well as the longer-term structural impacts on societies and the economy. The first Team Europe packages are already being implemented in the immediate neighbourhood: the Western Balkans, in the East and to the South.
The EU, as global actor and major contributor to the international aid system, will promote a coordinated multilateral response, in partnership with the United Nations, International Financial Institutions, as well as the G7 and the G20.
The European Union will continue to adapt its response to the evolving situation and focus on the most affected countries in need of health support, such as countries in Africa, the Neighbourhood, the Western Balkans, the Middle East and North Africa, parts of Asia and the Pacific, Latin America and the Caribbean. The EU’s response will focus on the most vulnerable people, including migrants, refugees, internally displaced persons and their host communities and integrate its strategic objectives set out in the Green Deal and the Digital Agenda.
From the overall package of €15.6 billion, €3.25 billion are channelled to Africa, including €1.19 billion for the Northern African neighbourhood countries.
The EU is securing in total €3.07 billion for the whole neighbourhood – €2.1 billion for the South and €962 million for the Eastern Partner countries – and €800 million for the Western Balkans and Turkey.
In addition, the overall package includes another €1.42 billion in guarantees for Africa and the neighbourhood from the European Fund for Sustainable Development (EFSD).
The EU will support Asia and the Pacific with €1.22 billion, another €291 million will go for the Africa, Caribbean and Pacific region, €918 million to support our partners in Latin America and the Caribbean and €111 million to support Overseas Countries and Territories.
Delivering the EU global response package in practice
€502 million for Emergency response actions focus amongst others, on:
• Providing immediate support to the Response Plans of the World Health Organisation and the United Nations, as well as to the appeal of the Red Cross and Red Crescent Movement to boost emergency preparedness and response in countries with weaker health systems and those dealing with humanitarian crises;
• Providing immediate humanitarian support in affected countries, in particular in health, water, sanitation and hygiene (WASH) and logistics;
• Supporting increased production in Europe of personal protective equipment and medical devices to meet urgent needs in Europe and in partner countries;
• Organising the supply of in-kind assistance to affected countries through the Union Civil Protection Mechanism;
• Providing guarantee and liquidity provisions to local banks via International Financial Institutions and European Development Finance Institutions, supported by the European Fund for Sustainable Development;
• Supporting global efforts to combat export restrictions and ensure supply chains remain intact, notably for essential medical supplies and pharmaceuticals;
• Associating the Western Balkans to EU initiatives such as the Joint Procurement Agreement for medical equipment and the European rapid alert system for communicable diseases. Countries negotiating their accession can also apply for the EU Solidarity Fund.
€2.8 billion to support research, health and water systems. The EU is, amongst others:
• Supporting partner countries in building resilient, responsive health and social protection systems;
• Supporting communication and awareness efforts on basic protective measures and hygiene advice to prevent the spread;
• Allowing some EU funding from global health initiatives like the Global Fund to fight Aids, Tuberculosis and Malaria, the Global Alliance for vaccines and Immunisation (GAVI) and the Global Financial Facility to be used to respond to the coronavirus, while ensuring continuation of vital health programmes;
• Supporting further research on diagnostics, treatment and prevention, and once a vaccine is available, fast-tracking approval and subsidizing vaccines and their delivery in vulnerable countries;
• Supporting experts training, epidemiological surveillance and strengthening regional health organisations in Africa, Latin American and the Caribbean and Asia and the Pacific;
• Welcoming candidate countries in the Western Balkans to the EU’s Health Security Committee and reflecting how best to associate potential candidates;
• Supporting equal access to health systems for migrants, refugees and host communities.
€12.28 billion to address the economic and social consequences. The EU is amongst other:
• Providing direct budget support and concessional financing for partner countries to adopt reforms for socio-economic development and poverty reduction, and measures to protect workers during the crisis;
• Mobilising macro-financial assistance for Western Balkan and neighbouring countries with the International Monetary Fund (IMF);
• Supporting the private sector, especially small and medium enterprises (SMEs) and the self-employed, via guarantees, liquidity provisions and technical assistance and further reorient guarantees from the European Fund for Sustainable Development towards short-term risk-sharing on loans;
• Providing public sector loans from the European Investment Bank, notably for healthcare equipment and supplies;
• Working with international organizations and European companies to build strong and resilient value chains in strategic sectors and ensure labour rights and corporate social responsibility;
• Promoting forms of debt relief considered by the IMF in affected countries.
Compliments of the European Commission.

April 8, 2020
“Beyond differences and geographical boundaries there lies a common interest,” one of the EU’s founding fathers, Jean Monnet, once said. In the fight against COVID-19, questions are being raised where that common interest lies.
Ten weeks into the coronavirus outbreak in Europe, EU Finance Ministers met last night via videoconference to devise a coordinated plan to restart Europe’s economy. Yet, two weeks after being tasked with bringing forward concrete solutions by the EU Heads of State and Government, Finance Ministers failed to find agreement over the most effective and sustainable response.
Finance Ministers were to discuss and decide on concrete proposals on a possible combination of European Stability Mechanism (ESM) loans, EIB credits, ‘coronabonds’, and the Commission’s proposed SURE unemployment reinsurance scheme. Following 16 hours of negotiations, Eurozone President Mário Centeno decided to call off discussions when it became clear that an agreement would not be found. Mr. Centeno will now reconvene his Ministers for further discussions on Thursday.
Ministers wholly agreed on using €200 billion of European Investment Bank (EIB) credit lines to support SMEs through the crisis and supported the Commission’s €100 billion proposal for SURE. The crux of the debate revolved around the application and conditions for using ESM loans to help national governments through the crisis. 
While, in the absence of concrete discussions on coronabonds, Ministers agreed on the use of ESM loans, talks broke down over substantial policy and ideological differences on the conditions that should be attached to using such credit lines. Italy’s Roberto Gualtieri, backed by France, Spain and a number of other countries, would like to see a temporary loosening of current conditions to allow ESM credit lines to be used more broadly. The fiscally hawkish countries, namely the Netherlands, Germany, Austria and Finland (the frugal four) have outrightly rejected such a lightening of conditions.
According to the Dutch Finance Minister Wopke Hoekstra, governments availing of ESM credit lines must only use them for coronavirus-related healthcare and economic costs. Similar to the conditions applied in the aftermath of the financial crisis, the frugal four are looking to tie economic reform conditions to the use of ESM loans.
The uncoordinated approach was further highlighted last night with the European Commission abruptly cancelling a planned announcement of an “exit strategy” from the COVID-19 pandemic. Following pressure from national leaders, the Commission was forced to downgrade the strategy to an internal discussion document. From a roar to a whimper.
It also emerged yesterday evening that Mauro Ferrari, the President of the Commission’s Joint Research Council, had resigned over the EU’s failed approach to the crisis. In a statement, Mr. Ferrari said that there was a  “complete absence of coordination of health care policies among member states, the recurrent opposition to cohesive financial support initiatives, the pervasive one-sided border closures, and the marginal scale of synergistic scientific initiatives.”
Yesterday’s developments highlight the structural challenges the European Union and its Member States are facing. The European Council is set to meet again following the Easter break. With the clock ticking, Heads of State and Government must step up and find agreement where their Ministers cannot.
Compliments of Vulcan Consulting – a member of the EACCNY.

April 7, 2020
The Council today adopted new rules which will make it easier for freight transport companies to provide information to authorities in digital form. Increased digitalisation of freight transport and logistics will bring significant cost savings for businesses, and make the transport sector more efficient and sustainable.
A provisional agreement was reached between the presidency and the European Parliament on 26 November 2019. The agreed text was endorsed by member states’ ambassadors meeting in the Permanent Representatives Committee (Coreper) on 18 December 2019, and the Council confirmed the political agreement on 18 February 2020.
The new rules will create a uniform legal framework for the use of electronic freight transport information for all modes of transport. All relevant public authorities will be required to accept information provided electronically on certified platforms whenever companies choose to use such a format to provide information as proof of compliance with legislative requirements. However, companies will still be able to present the information in paper format if they prefer.
At the moment, most freight transport companies and other transport business stakeholders use paper documents.
Next steps
Today’s vote, taken using a written procedure, means that the Council has adopted its position at first reading. The legal act now needs to be adopted by the European Parliament at second reading before being published in the Official Journal.
The new regulation will enter into force 20 days after publication. The Commission will adopt the relevant technical specifications before the obligation for public authorities to accept information made available electronically comes into force.
Regulation on electronic freight transport information – full text
EU promotes digitalisation of freight transport information – Coreper confirms agreement with Parliament (press release, 18 December 2019)
Compliments of the European Council.

April 6, 2020
The COVID-19 pandemic has pushed the world into a recession. For 2020 it will be worse than the global financial crisis. The economic damage is mounting across all countries, tracking the sharp rise in new infections and containment measures put in place by governments.
China was the first country to experience the full force of the disease, with confirmed active cases at over 60,000 by mid-February. European countries such as Italy, Spain, and France are now in acute phases of the epidemic, followed by the United States where the number of active cases is growing rapidly. In many emerging market and developing economies, the epidemic appears to be just beginning.
CONTINUE READING…
AUTHORS:
• John Bluedorn, Gita Gopinath, and Damiano Sandri
Compliments of the IMF.

March 27, 2020
The EU and 15 other members of the WTO today decided on an arrangement that will allow them to bring appeals and solve trade disputes among them despite the current paralysis of the WTO Appellate Body. Given its strong and unwavering support for a rules-based trading system, the EU has been a leading force in the process to establish this contingency measure in the WTO.
Commissioner for Trade Phil Hogan said: “Today’s agreement delivers on the political commitment taken at ministerial level in Davos in January. This is a stop-gap measure to reflect the temporary paralysis of the WTO’s appeal function for trade disputes. This agreement bears testimony to the conviction held by the EU and many other countries that in times of crisis working together is the best option. We will continue our efforts to restore the appeal function of the WTO dispute settlement system as a matter of priority. In the meantime, I invite other WTO Members to join this open arrangement, crucial for the respect and enforcement of international trade rules.”
The Multiparty Interim Appeal Arbitration Arrangement mirrors the usual WTO appeal rules and can be used between any members of the Organisation willing to join, as long as the WTO Appellate Body is not fully functional.
Today’s agreement underscores the importance that the participating WTO members – Australia; Brazil; Canada; China; Chile; Colombia; Costa Rica; the European Union; Guatemala; Hong Kong, China; Mexico; New Zealand; Norway; Singapore; Switzerland; and Uruguay – attach to a functioning two-step dispute settlement system at the WTO. Such a system guarantees that trade disputes can be resolved through an impartial and independent adjudication, which is essential for the multilateral trading system based on rules.
We expect the Multiparty Interim Appeal Arbitration Arrangement to be officially notified to the WTO in the coming weeks, once the respective WTO Members complete their internal procedures, after which it will become operational.
Compliments of the European Commission.

April 3, 2020
The Commission has today decided to approve requests from Member States and the UK to temporarily waive customs duties and VAT on the import of medical devices, and protective equipment, from third countries in order to help in the fight against coronavirus. This will make it easier financially to get the medical equipment that doctors, nurses and patients desperately need.
The Commission has swiftly approved requests received from all Member States.
This measure includes masks and protective equipment, as well as testing kits, ventilators and other medical equipment. It will apply for a period of 6 months, with a possibility for further extension.
Commission President Ursula von der Leyen delivered a video message on today’s decision. Watch it here.
Paolo Gentiloni, Commissioner for Economy said: “In this emergency it is vital that medical equipment and devices get quickly to where they are needed. By waiving customs and VAT duties on imports of these products from outside the EU, the European Commission will help make those products more accessible. I want to express again my deep respect and gratitude to health workers across Europe. Today’s measure should help them receive the equipment they need to protect themselves and continue saving lives.”
On 20 March 2020, the Commission invited all Member States, as well as the UK, to submit a request to waive customs duties and VAT on the importation of protective and other medical equipment from third countries. All Member States and the UK have done so. Today’s decision takes effect retroactively from 30 January.
Background
Current EU legislation has exceptional tools available in order to help victims of disasters, which can be used to face the unprecedented health crisis caused by coronavirus.
EU customs legislation (Council Regulation (EC) No 1186/2009) provides for the possibility to grant duty relief for the “benefit of disaster victims”. It can be applied to imports by State organisations or approved charitable or philanthropic organisations. To grant relief, a decision from the Commission is required, acting at the request of the Member States concerned.
Similarly, EU VAT law (Council Directive 2009/132/EC) has mirroring provisions as regards exemption from VAT on the final importation of certain goods.
Compliments of the European Commission.

April 3, 2020
• Extraordinary Board of Directors discussed the EIB Group’s proposed response to economic effects of COVID-19 crisis: a €25 billion pan-European guarantee fund to support up to €200 billion for the European economy• The Board also approved key elements of an emergency measure package announced in March
The Board of Directors of the European Investment Bank (EIB) today discussed the creation of a €25 billion guarantee fund to enable the EIB Group to scale up its support for companies in all 27 EU Member States by an additional up to €200 billion. This comes on top of an immediate support package of up to €40 billion announced in March. The Board prepared the proposal for the guarantee fund for discussion by the Eurogroup on the 7th of April 2020.  
“We need a pan-European response to the pandemic. We need this response to be ambitious and we need it fast,” said EIB President Werner Hoyer. ”Companies throughout the European Union need massive support. They need more credit lines, bridge loans and working capital to overcome this unprecedented challenge. With the backing of the Member States, the EIB Group’s coronavirus response would support financing of up to 1.5% of Europe’s GDP to face this unprecedented crisis, complementing the extraordinary efforts made by the Member States.”
The pan-European guarantee fund would serve as a protective shield for European firms facing liquidity shortages. It could be set up with contributions provided by the Member States and be open to participation by other EU institutions. Building on the EIB Group’s existing guarantee programmes and proximity to the market, the funds could be deployed within a very short time. The scheme would be implemented by the EIB and the European Investment Fund (EIF), which form the EIB Group, in close partnership with national promotional banks, the European Commission and other financial partners. It would create a level playing field for small and medium-sized companies in all Member States.  
The deployment of funds through the EIB Group would ensure that every Member States benefits from the EIB’s AAA rating. The guarantee fund would complement and enhance national packages as.EU Member States are heavily influenced by what happens to overall EU demand and market confidence, intra-EU trade, and supply chains and financial markets. 40% of the positive impact on growth and employment from EU investments are thanks to cross-border spillovers of investments. This makes the EIB scheme genuinely complementary to national measures. The EIB Group will work closely with experts in national authorities, including central banks, to identify where the needs are most pressing.
President Hoyer added: “The guarantee fund would be an effective, timely and truly European response to an unprecedented crisis. We want to fight the economic impact of COVID-19 now by getting ahead of it and relieving the stress on the real economy rather than dealing with fall-out later on. Sharing the burden across Member States avoids adding more debt to those countries that are hardest hit by the crisis and under the highest health expenditure stress.”
The Board also approved a multi-beneficiary intermediated loan (MBIL) of EUR 5bn covering all EU Member States, as part of its emergency response package which aims to rapidly mobilise financing for SMEs and Midcaps in the coming weeks up to EUR 40bn.
In addition, the EIB Group is using existing financial instruments shared with the European Commission – primarily the InnovFin Infectious Disease Finance Facility – to finance projects that work towards halting the spread of the coronavirus, finding a cure, and developing a vaccine. The EIB Group will also support emergency measures to finance urgent infrastructure improvements and equipment needs in the health sector, using existing framework loans or undisbursed amounts from existing health projects. The EIB Group’s current pipeline of projects in the health sector amounts to around €5 billion.
Compliments of the European Investment Bank.

April 6, 2020
The European Commission has unlocked €1 billion from the European Fund for Strategic Investments (EFSI) that will serve as a guarantee to the European Investment Fund (EIF), part of the European Investment Bank Group. This will allow the EIF to issue special guarantees to incentivise banks and other lenders to provide liquidity to at least 100,000 European SMEs and small mid-cap companies hit by the economic impact of the coronavirus pandemic, for an estimated available financing of €8 billion. Today’s announcement fulfils the commitment in the Commission Communication of 13 March to bring immediate relief to hard-hit SMEs, with money able to flow already in April. It is part of the package of measures announced by the EIB Group on 16 March designed to rapidly mobilise support for Europe’s SMEs and mid-caps.
One of the immediate economic consequences of the coronavirus pandemic is the sudden lack of liquidity affecting small and medium-sized businesses. These companies are typically the most affected in a crisis, and it is essential to support them with adequate liquidity so they can survive the crisis. However, in a situation of liquidity crunch banks are not incentivised to lend SMEs money due to the sudden increase in perceived risk. That is why EU guarantees supporting these loans are necessary. As of today, the EIF is offering to the market dedicated EFSI-backed guarantees to contain the impact of the pandemic on small and medium sized enterprises and small mid-cap companies.
European Commission Executive Vice-President for An Economy that Works for People, Valdis Dombrovskis, said: “Across Europe, our businesses are struggling. The EU is responding quickly to help cushion the blow and to help small and medium-sized companies, which are especially vulnerable. Today, the Commission and the European Investment Fund are making available €8 billion in financing, bringing immediate cash relief to SMEs in Europe affected by the coronavirus pandemic. Money will be flowing already this month via local banks and lenders to help those most hard-hit by the crisis.”
EIF Chief Executive, Alain Godard said: “In times of unprecedented crisis it is essential that SMEs receive the support they need. The EIF is working intensively to ensure a swift and adequate response to the COVID-19 virus outbreak and we are pleased to be launching this new €8 billion initiative with the Commission today. While this is an important first step, the EIB Group will continue to work on finding additional solutions to quickly meet the financing needs of entrepreneurs across Europe.”
The €1 billion unlocked from the EFSI under the COSME Loan Guarantee Facility and the InnovFin SME Guarantee under Horizon 2020 allows the EIF to provide guarantees worth €2.2 billion to financial intermediaries, unlocking €8 billion in available financing. The guarantees will be offered through the EIF to the market, via a call for expressions of interest issued today to several hundred financial intermediaries, comprising banks and alternative lenders. Key features of these guarantees will be:
• Simplified and quicker access to the EIF guarantee
• A higher risk cover – up to 80% of potential losses on individual loans (as opposed to the standard 50%);
• Focus on working capital loans across the EU;
• Allowing for more flexible terms, including postponement, rescheduling or payment holidays
The new features will be accessible to new as well as existing financial intermediaries already working with EIF, who will extend special conditions to more than a hundred thousand companies benefitting from guarantees under the COSME LGF and the InnovFin SMEG programmes.
Next steps
Following today’s call for expression of interest, financial intermediaries with existing EIF agreements under these COSME and InnovFin programmes will be able to access the new guarantees immediately upon their request. Other financial intermediaries can access the guarantees following a swift application process. In that way new money can already start flowing to hard-hit businesses in April. SMEs will be able to apply directly to their local banks and lenders participating in the scheme, which will be listed on www.access2finance.eu.
The Commission and the EIB Group will continue to work on additional measures and will use all the tools at their disposal to help contain the coronavirus pandemic and address its economic consequences.
Background
To unlock the €1 billion from the EU budget, the Commission and the EIB Group have made a series of amendments to their specific agreements.
The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe’s micro, small and medium-sized businesses by helping them to access finance. EIF designs and develops both venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.
COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020 with a total budget of €2.3 billion. At least 60% of the programme is devoted to improving access to finance for SMEs in Europe, with two financial instruments. The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs. COSME Equity Facility for Growth helps provide risk capital to SMEs mainly in the expansion and growth stages.
Horizon 2020  is the EU programme for Research and Innovation running from 2014 to 2020 with a total budget of €77 billion. Under Horizon 2020, InnovFin – the EU Finance for Innovators – financial instruments aim to facilitate and accelerate access to finance for innovative businesses across Europe. In particular, the InnovFin SME Guarantee (SMEG) Facility provides guarantees and counter-guarantees on debt financing of between €25,000 and €7.5 million to improve access to finance for innovative SMEs and Midcaps. Under InnovFin SMEG, a facility managed by the EIF, financial intermediaries – banks and other financial institutions – are guaranteed against a proportion of their losses incurred on the debt financing covered under the facility.
The European Fund for Strategic Investments (EFSI) is the financing pillar of the Investment Plan for Europe, which was launched in November 2014 to reverse the downward trend in investment levels and put Europe on the path to economic recovery. Its innovative approach based on the use of an EU budget guarantee provided to the EIB Group enables substantial public and private sector funds to be mobilised for investment into strategic sectors of the European economy. The Investment Plan for Europe has already generated more than €460 billion of investment and supported 1.1 million start-ups and SMEs across Europe. Find the latest EFSI figures by sector and by country here.
Compliments of the European Commission.

April 2, 2020
Highlights
• Financing is guaranteed by the European Fund for Strategic Investments (EFSI) and will help make the sector more resilient in light of Covid-19
• New financing targets investments by private cooperatives and companies in the agriculture and bioeconomy sector
• The EIB programme loan will amount to €700 million and is expected to back close to €1.6 billion of investment across Europe
The European Investment Bank (EIB), the EU bank, announced the launch of a new financing initiative that aims to unlock close to €1.6 billion of investment in the agriculture and bioeconomy sector. The financing aims to support private companies operating throughout the value chains of production and processing of food, bio-based materials and bioenergy. It will be guaranteed by the EU budget under the European Fund for Strategic Investments (EFSI), which forms the financial pillar of the “Investment Plan for Europe”.
The lending programme will enable direct lending for private sector investments ranging from €15 million to €200 million, with the EIB loan amount ranging from €7.5 million to €50 million. Targeted investments will support environmental protection and natural resource efficiency, renewable energy, innovation, competitiveness, and energy efficiency. The programme will contribute to safeguard and create employment in rural areas and therefore promote rural development and territorial integration across the EU.
The programme is a continuation of the first €400 million agriculture and bioeconomy programme loan that was launched in 2018 and is nearly fully committed. The first programme loan generated significant interest in the market with a number of projects originated with corporate and cooperative counterparties in several EU countries (e.g. France, Poland, Ireland, Italy and Latvia).
EIB Vice-President responsible for bioeconomy, Andrew McDowell: “Since the coronavirus pandemic reached Europe the EIB has been fully mobilised with the European Commission to deploy a support plan for the hardest hit SMEs, including those in the agri-food sector. Nevertheless, the EIB’s long-term financing of the sector continues in parallel, with a focus on innovation, climate action, environmental sustainability and rural development. The first €400 million of the agriculture programme loan has already supported 10 transformational investments for European agriculture that have also strengthened rural communities. With this second financing, we are providing an additional €700 million to build on this success and meet market demand.”
European Commissioner for Agriculture Janusz Wojciechowski said: “The coronavirus pandemic affects every single one of us and every single sector. In this dramatic context, I warmly welcome this second step in EIB’s strategy under the Investment Plan to finance measures deploying a support plan for the AGRI-food sector. I am strongly convinced that, this will be a very important and useful instrument in helping the sector remain robust and resilient to overcome the crisis.”
Compliments of the European Investment Bank.