EIB Group establishes EUR 25 billion guarantee fund to deploy new investments in response to COVID-19 crisis

The EIB Group is set to play a key role in the fight against the economic consequences of the COVID-19 pandemic. The Board of Directors of the European Investment Bank (EIB) backed the creation of a €25 billion European COVID-19 guarantee fund. The fund will enable the EIB Group to scale up its support for European companies up to an additional €200 billion – with a focus on SMEs.

The guarantee fund envisages a contribution from all 27 EU Member States and will also be open to contributions by third parties, for example from the EU budget. The guarantee fund will be established under the EIB’s structure of Partnership Platform for Funds (PPF), based on existing legal frameworks and standardized procedures. The fund will be formally established as soon as Member States accounting for at least 60% of EIB capital have made the necessary commitments. As there is no need to create new instruments or processes, the fund can be set up rapidly.

“Europe needs an ambitious pan-European response to the pandemic. This guarantee will allow the EIB Group to play a strong role in the EU package of measures agreed by the Eurogroup. The EU Finance Ministers asked us to act without delay and that is what we are doing. We can now move very fast indeed, work hand in hand with national and EU partners, and ensure that support reaches the economy wherever it is most deeply and urgently needed,” said EIB President Werner Hoyer.

The European COVID-19 guarantee fund will be implemented by the EIB and the EIF, the Group’s subsidiary specialised in funding small and medium-sized enterprises. It will serve as a protective shield for European firms facing liquidity shortages. In order to address the consequences of the pandemic in all impacted markets and sectors, the EIB Group will deploy a broad mix of products. The EIB Group and its partners will make sure that the mix of products backed by the fund responds to market needs and requirements to respond to the crisis. The EIB Group will implement the fund in consultation with experts in national authorities, including central banks, to identify where the needs are most pressing.

Original source: EIB
Published on 16 April 2020