May 14, 2020 |
With the current fast-changing developments, policy makers need to know what is happening to the economy in real time, but they often must settle for data telling them what happened many weeks ago. And international trade, which links countries through a complex web of supply chains, is an area where timely information is especially valuable from a global perspective.
Most trade takes place by sea, and—for navigational safety purposes—virtually all cargo ships report their position, speed, and other information many times a day. A new IMF methodology using these data can help better inform us how international trade is affected by the COVID-19 pandemic.
Building on machine-learning techniques, we can provide better answers to simple questions such as: How big is the drop in trade activity? Should it be attributed mostly to exports or to imports?
A new approach
Using over one billion messages from ships over a period of five years, the newly-developed methodology closely replicates official trade statistics for many countries and for the world in aggregate. It is available at a daily frequency in real time, while official statistics are typically delayed by many weeks. At the global level, our indicators built from ships’ radio signals closely approximate monthly official trade statistics (with a correlation of nearly 0.9 in levels, and around 0.4 in quarter-on-quarter growth rates).
The top panel of our Chart of the Week shows a dramatic fall in Chinese exports in the wake of initial lockdown measures to contain the spread of the virus. Exports resumed in early to mid-March, though in late-April the recovery remained incomplete and showed renewed signs of weakness.
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AUTHORS:
• Diego Cerdeiro, Andras Komaromi, Yang Liu, and Mamoon Saeed
Compliments of the IMF.

May 30, 2020 | Statement by the President of the Commission Ursula von der Leyen and High Representative/ Vice-President Josep Borrell
As the world continues to fight the COVID-19 pandemic, the main task for everyone is to save lives and contain and mitigate this pandemic. The European Union continues to support the WHO in this regard and has already provided additional funding.
In an EU-led resolution adopted by consensus on 19 May at the World Health Assembly, all WHO Member States agreed to initiate, at the earliest appropriate moment, an impartial, independent and comprehensive evaluation to review lessons learnt from the international health response to the coronavirus, notably with the objective of strengthening future global health security preparedness.
Evaluating our global response is necessary as there are lessons to be learnt from this pandemic, its outbreak and response to it. The evaluation of our collective performance at international level is only a necessary process, aiming at strengthening health security.
Global cooperation and solidarity through multilateral efforts are the only effective and viable avenues to win this battle the world is facing. The WHO needs to continue being able to lead the international response to pandemics, current and future. For this, the participation and support of all is required and very much needed. In the face of this global threat, now is the time for enhanced cooperation and common solutions. Actions that weaken international results must be avoided. In this context, we urge the US to reconsider its announced decision.
Compliments of the European Commission.

May 29, 2020 |
Why do we need InvestEU for the post-coronavirus recovery?
InvestEU is the EU’s proposed flagship investment programme to kick-start the European economy. It is well-placed to provide long-term funding and to support Union policies in the recovery from a deep economic and social crisis. This has been shown with the successful implementation of the European Fund for Strategic Investments and other EU financial instruments in the wake of the past financial crisis.
In the current coronavirus crisis, the market allocation of financial resources is not fully efficient and perceived risk impairs private investment significantly. Deep uncertainty currently compromises the quality of financial market information and lenders’ ability to assess the viability of companies and investment projects. If left unchecked, this can create pervasive risk aversion towards private investment projects and contribute to a ‘credit crunch’. Under such circumstances, the key feature of InvestEU of de-risking projects to crowd in private finance is particularly valuable and should be utilised.
An enhanced InvestEU programme thanks to Next Generation EU will be able to provide crucial support to companies and to ensure a strong focus of investors on the Union’s medium- and long-term policy priorities, such as the European Green Deal and the digitalisation transition and greater resilience. To address all of these challenges, the Commission is updating its original InvestEU proposal from 2018 to make sure it can better respond tothe current economic crisis.
What are the main changes to InvestEU?
The new proposal contains two main changes to the InvestEU Programme as partially agreed between co-legislators in April 2019:
• An increase of the InvestEU budget to reflect the higher investment needs and an environment of increased risk. The financial envelope for the sustainable infrastructure window is doubled, in line with the President’s Communication “Europe’s moment: Repair and Prepare for the Next Generation”.
• A broadened scope through the addition of a fifth window – the strategic European investment window – in order to cater for the future needs of the European economy and to promote and secure EU strategic autonomy in key sectors.
What will the new strategic European investment window finance?
The outbreak of the pandemic has shown the interconnectivity of global supply chains and exposed some vulnerabilities, such as the over-reliance of strategic industries on non-diversified external supply sources. Such vulnerabilities need to be addressed, to improve the Union’s emergency response as well as the resilience of the entire economy, while maintaining its openness to competition and trade in line with its rules. The new strategic European investment windowwill focus on building stronger European value chains in line with the strategic agenda of the Union and the New Industrial Strategy for Europe, as well as supporting activities in critical infrastructure and technologies
This reinforcement is of particular importance in the post-crisis situation, as some Member States might not have sufficient financial capacity to support these projects with national State aid. Moreover, many of these projects are cross-border and require a European approach.
How will the new window complement the pre-existing windows?
In the current context, the strategic European investment window would bring value added to the original windows, as it focuses on recipients or projects based on their high European strategic importance.
The new window would both target specific projects (e.g. supporting large consortia or public-private partnerships aimed at developing a specific technology and building critical infrastructure) and provide diffused financing, for instance by supporting the emergence of whole ecosystems of entrepreneurs active in the targeted sectors (e.g. innovative SMEs working on technologies of potential relevance to industrial biotechnology and pharmaceuticals).
The additionality requirements under this window would also differ from those envisaged for the other windows. For instance, the additionality of the support under the new window to large corporates would be in maintaining and developing their production within the Union or under the control of European investors and in scaling up the deployment of innovative technologies, rather than in purely risk-related considerations of the InvestEU support.
What are the changes in budgetary terms[1]?
The new proposal foresees an increase of the original financial envelope. This includes a doubling of the guarantee amount allocated to the sustainable infrastructure window under the InvestEU Fund as well as the allocation of an additional guarantee amount to the new window. More concretely:
• Sustainable infrastructure window: €20 bn• Research, innovation and digitisation window: €10 bn
• SME window: €10 bn
• Social investment and skills window: €3.6 bn
• Strategic European investment window: €31 bn
The new proposal also foresees an increase of the financial envelope allocated to the InvestEU Advisory Hub by an amount of €200 million to cater for the needs of the new window as well as the increasing needs of the other four windows.
How will InvestEU work?
The main principle of how InvestEU will function does not change. The InvestEU Fund will mobilise public and private investment through an EU budget guarantee of €75 billion that will back the investment projects of implementing partners such as the European Investment Bank (EIB) Group and others, and increase their risk-bearing capacity.
Under the new proposal, the guarantee will be provisioned at 45%, meaning that €34 billion of the EU budget is set aside in case calls are made on the guarantee. The size of the provisioning is based on the type of envisaged financial products and the riskiness of the portfolios, taking into account the experience under the EFSI and current financial instruments, as well as the likely changes in market circumstances following the coronavirus crisis.
What is the role of the EIB Group in the new proposal?
Given its role under the Treaties, its capacity to operate in all Member States and the existing experience under the current financial instruments and the EFSI, the European Investment Bank Group will remain a privileged implementing partner for the InvestEU. It will implement 75% of the EU guarantee.
The EIB Group will also play a central role in implementing advisory support under the InvestEU Advisory Hub. Moreover, it will advise the Commission and perform operational tasks in relation to the Hub.
Is the new window open to other implementing partners than the EIB Group?
Yes. The new window is open to other implementing partners than the EIB Group, including national promotional banks and institutions, as well as international financial institutions such as the European Bank for Reconstruction and Development or the Council of Europe Development Bank.
The Commission will continue the discussions with potential implementing partners to ensure a swift and efficient deployment of the instrument, which is even more crucial under the current circumstances.
Are there any changes to the InvestEU governance?
An Investment Committee composed of independent experts will remain responsible for approving the individual requests. As the Investment Committee will operate in different configurations corresponding to the InvestEU policy windows, a fifth configuration has been added to the proposal.
Are there any changes to the InvestEU eligibility criteria?
The policy areas eligible for financing and investment operations under the existing four windows remain the same as proposed and negotiated in annex II to  the InvestEU Regulation. However, for the strategic European investment window, new intervention areas are introduced, as referenced above.
In case a financing or investment operation proposed to the Investment Committee falls under more than one policy window, it will be attributed to the policy window under which its main objective or the main objective of most of its sub-projects falls. The Investment Guidelines will specify the criteria for the allocation of financial products (under which financing and investment operations will be submitted) to specific windows.
For more information
Factsheet: An enhanced InvestEU Programme and Strategic Investment Facility
Proposals: EU long-term budget 2021-2027: Commission Proposal May 2020
Compliments of the European Commission.

May 29, 2020 |
As announced by European Commission President von der Leyen on 27 May 2020, the Commission is aiming to kick-start the EU economy by incentivising private investments. The Commission today proposes a new Solvency Support Instrument, which builds on the existing European Fund for Strategic Investments, to mobilise private resources to urgently support viable European companies in the sectors, regions and countries most economically impacted by the pandemic. The Solvency Support Instrument can be operational from 2020 and will have a budget of €31 billion, aiming to unlock €300 billion in solvency support for otherwise healthy companies from all economic sectors and prepare them for a cleaner, digital and resilient future. The Commission is enhancing InvestEU, Europe’s flagship investment programme, to a level of €15.3 billion to mobilise private investment in projects across the Union. Finally, the Commission is proposing a new Strategic Investment Facility built into InvestEU, to generate investments of up to €150 billion, thanks to a contribution of €15 billion from Next Generation EU, to boost the resilience of strategic sectors, notably those linked to the green and digital transition, and key value chains in the internal market. For more details see the Q&A and factsheet on the Solvency Support Instrument; and the Q&A and factsheet on InvestEU. All legal texts related to the new MFF proposal are available here.
Compliments of the European Commission.

Together with our members we are creating a Video series of first-hand accounts of the Pandemic’s impact, both personally & professionally.
We invite you to join us today for a first-hand look at the impact of the global shutdown following the Coronavirus (COVID-19) outbreak – Today we are featuring Annika Rembe, Consul General, Consulate General of Sweden a EACCNY member.The questions we asked our members for this series are:1) What are some challenges you, personally and your organization have faced?2) What are some of the most surprising (positive, innovative) responses/changes you have witnessed?3) How will this experience change us going forward, as a society and in terms of how we do business?

EACCNY has its finger on the pulse of how this worldwide pandemic is effecting companies and organizations on both sides of the Atlantic. EACC is where Americans & Europeans connect to do business.
Stay tuned for more on this series! We hope you enjoy these short vignettes our members and friends of the EACC created to share their experience.

May 28, 2020 | By Tao Zhang, Deputy Managing Director, IMF
“As Prepared for Delivery”
I thank Minister Annamuhammedov and Ms. Elena Panova for their kind invitation to participate in this conference. It is not accidental that this conference is taking place in Ashgabat. Turkmenistan was one of the first countries to have formally accepted all Sustainable Development Goals developed by the United Nations and has been integrating these goals into its national plans for socio-economic development.
Achieving SDGs is an important priority for emerging markets and developing countries. Significant progress has already been made in the Caucasus and Central Asia region in this area. Yet there is still a lot more to be done. The COVID-19 pandemic has made the task of achieving SDGs even more urgent and challenging.
Before the COVID pandemic, we knew that financing the required scale-up of spending for reaching the SDGs was a challenge. An IMF study showed that the additional spending required for meaningful progress in the areas of health, education, and selected infrastructure was quite large. For emerging market economies, the additional annual spending reached an estimated 4 percentage points of their combined GDP in 2030, compared to 15 percentage points of GDP for low-income developing countries. Looking specifically at the CCA region, our estimates indicate that the additional annual spending required for countries represented here reach about 10 percentage points of their GDP in 2030. Substantial external resources are needed when domestic efforts—for instance, mobilizing tax revenues and enhancing spending efficiency—are not enough for financing the SDGs.
The human and economic impact of COVID 19 pandemic makes spending needs larger and SDG financing more challenging. The crisis risks setting back previous achievements in human and social developments such as equality and poverty reduction. Health and social spending needs increase as countries respond to the emergency. With revenue losses and higher debt in many countries, fiscal space is shrinking. The crisis also highlights underlying structural shortcomings in some cases such as limited social safety net to adequately protect those at a higher risk of falling into poverty and uneven access to quality public services by different groups in the population.
The COVID recovery presents opportunities to accelerate the necessary reforms for achieving SDGs. Under the current difficult circumstances, increasing the efficiency of public spending to achieve savings and ensure spending is allocated to areas where it is most needed, including health, education and infrastructure, is of crucial importance. To spend efficiently, countries must develop political and societal consensus, work on building strong institutions, and instill principles like transparency, accountability, and responsiveness. Business friendly environment must be created to engage the private sector.
The IMF, with its expertise in macroeconomic and financial issues and its global membership, supports the development efforts of its member countries and promotes global economic and financial stability. The IMF has launched a number of initiatives to support countries’ response to COVID while continuing support to member countries as they pursue the SDGs. These include increased financial support for low-income developing countries—as of May 20, we have provided more than 16 billion of SDRs via emergency financing facilities to 59 countries; bolstering support to fragile and conflict states to address their unique challenges; and enhanced policy advice and capacity building on measures to promote inclusion and sustainable macroeconomic environment.
Financing for SDG also calls for global and regional cooperation. While countries must own the responsibility for achieving the SDGs, the private sector, official development assistance, philanthropists, and international financing institutions can help accelerate the efforts to close the remaining gap.
This conference is focusing on crucial issues and is taking place at a difficult juncture. I wish the organizers and participants every success in this event.
Compliments of the IMF.

The coronavirus pandemic has claimed thousands of lives and put health systems under enormous strain. The Commission’s immediate priority is fighting the virus and mitigating the socio-economic consequences of the pandemic. At the same time, we must start looking ahead so that Member States can gradually lift their containment measures, with a view to entering the recovery phase and revitalising our societies and economy.
While there is no one-size-fits-all approach to a gradual, science-based and effective lifting of containment measures, a highly coordinated way forward is a matter of common European interest.
Responding to the call of the European Council of 26 March, the Commission, in cooperation with the President of the European Council, has put forward a European roadmap towards lifting coronavirus containment measures. It takes into account the expertise of the European Centre for Disease Prevention and Control the Commission’s Advisory Panel on the coronavirus, experience of Member States and guidance from the World Health Organization. Evidently, any such reflection is based on the scientific knowledge available today, and should be revised as further evidence appears.
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Compliments of the European Commission.