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.
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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.