More than three months after the coronavirus outbreak in China, the COVID-19 epidemic has been spreading rapidly across the globe. In addition to the worrying effects on people’s healthiness, negative demand shocks hit businesses of most sizes and sectors. However, public responses in Europe raise hope for the economy: Many EU governments understand that particularly small and medium-sized exporters face direct damage as a result of the coronavirus outbreaks. Which public instruments are available and can step in immediately? Exim-Banks and ECAs are counter-cyclical instruments, giving evidence for their important role in global trade, for example, during the Global Financial Crisis.
Who delivers? While a small number of Exim-Banks and ECAs is still surprisingly reluctant, our research shows that most institutions provide strong responses in different domains: The current focus is clearly on facilities for pre-shipment finance particularly for SMEs with substantial financing packages. A further key amendment is driven by the expectation that private credit insurers will significantly restrict cover for exporters. In addition, the focus of institutions in several countries is much more on eligibility. Is this enough? Concerted action is not only required on European level. While some countries have created task forces with key public institutions including Exim-Banks and ECAs, others lack a concise national strategy. This is a missed opportunity, as the coherent interplay of policy instruments in a `strategic eco(n)system` is crucial even in a situation without such a significant crisis. This indicates the need for even more responsive action.
Find out more: Who Delivers