Coronavirus disease 2019 (COVID-19) is caused by a new type of coronavirus. It was first identified in the Chinese municipality of Wuhan in December 2019.
In January 2020, isolated cases began to appear in EU Member States, and by the end of February 2020, there was a significant increase of COVID-19 cases in northern Italy. Since then, all EU members have reported cases, and the number of people infected continues to increase. The rapid spread of the virus is putting a heavy strain on both public health and the economy.
An immediate response to the crisis
The EIB Group has proposed a plan to mobilise up to €40 billion of financing. This will go towards bridging loans, credit holidays and other measures designed to alleviate liquidity and working capital constraints for SMEs and mid-caps. The EIB Group, including the European Investment Fund, which specialises in support for SMEs, will work through financial intermediaries in the Member States and in partnership with national promotional banks.
The proposed financing package consists of:
- Dedicated guarantee schemes to banks based on existing programmes for immediate deployment, mobilising up to €20 billion of financing;
- Dedicated liquidity lines to banks to ensure additional working capital support for SMEs and mid-caps of €10 billion;
- Dedicated asset-backed securities (ABS) purchasing programmes to allow banks to transfer risk on portfolios of SME loans, mobilising another €10 billion of support.
All these actions can be implemented quickly to ease liquidity shortages and will be implemented in partnership with national promotional banks wherever feasible.
The EIB group is exploring possibilities to scale up its overall response to the coronavirus crisis.