The EU and its Member States are taking unprecedented measures to fight COVID-19 and its economic consequences. The European Commission is, therefore, mobilizing a package of immediate response funding drawn from all existing EU budget resources.
These incentives by the EU and its Member States are not the only source of Economic and Fiscal Response Measures with regards to COVID-19. Several International Financial Institutions (IFIs) have also shown their commitment towards non-EU countries, such as in the Balkans, the Middle East, Africa and Asia. Here below, three of these IFI responses are highlighted: the World Bank, the European Bank for Reconstruction and Development and the Council of Europe Development Bank.
The World Bank
The World Bank has approved an increased $14 billion Fast Track Facility (FTF) to assist countries and companies in their efforts to prevent, detect, and respond to the rapid spread of COVID-19. It is preparing project in 40 countries for up to $1.7 billion under the FTF. Some of the most advanced operations are dedicated to Afghanistan and Ethiopia. In addition to the FTF, the World Bank will also provide funding through the restructuring of some of its existing projects. A range of rapid procurement modalities to support bulk purchasing has been identified, on top of the standard country-led procurement.
The European Bank for Reconstruction and Development (EBRD)
The EBRD unveiled a €1 billion emergency coronavirus financing package. This “Solidarity Package” of measures aims to help companies across its regions deal with the impact of the pandemic. Under this emergency package, it will among others set up a resilience framework to provide financing for existing EBRD clients with strong business fundamentals experiencing temporary credit difficulties. The measures will include an expansion of trade finance and the provision of short-term finance of up to two years through financial institutions, specifically targeted at SMEs. For municipal, energy and infrastructure clients it will arrange balance sheet restructuring and short term liquidity support, as well as short-term working capital facilities of up to two years for other corporates and energy developers.
The Council of Europe Development Bank (CEB)
In response to the challenges posed to Europe’s public health systems, the CEB has adapted its Public Finance Facility (PFF) for national and sub-national public sector partners to cover: the acquisition, under emergency procedures, of medical equipment and consumable material; the rehabilitation and transformation of spaces, medical units; and the mobilisation of additional expertise. Moreover, through programme loans, it will also engage wit national promotional banks to continue supporting MSMEs and municipal companies.
Original source: Schuman Associates