Overall, larger firms were more likely to receive support than smaller ones (Figure 13), which in “normal” times already tend to be more vulnerable and face more difficulties in accessing finance. The amendment further expands on the flexibility introduced by the Commission's State aid Temporary Framework with respect to the possibility by State insurers to provide insurance for short-term export-credit. EU funding is available for all types of companies - small and medium enterprises and larger businesses. Some early evidence and possible policy responses", published on 26 May 2020. Moreover, 20 per cent of firms stated that they had to lay off employees or are planning to cut one quarter or more of … Jeden verfügbaren Euro einsetzen, um Menschenleben zu schützen und Existenzgrundlagen zu sichern), (Reageerimine koroonaviirusele. To provide relief for consumers and businesses, and to help further mitigate the impact of the coronavirus pandemic, on 14 July the Commission welcomed a list of ‘best practices’ agreed by the European financial sector, as well as consumer and business organisations. This package ensures that banks can continue to lend money, thereby supporting the economy and significantly mitigating the effects felt by citizens and businesses. The Commission’s Winter Economic Forecast, presented on 13 February 2020, already identified coronavirus as a risk to the European economy. An economic recovery plan is needed which includes short, medium and long-term measures to diversify the economy and create new employment opportunities. The EU adopted a regulation in April 2020 for exceptional amendments and flexibility measures in the European Maritime and Fisheries Fund. The proposed financing package consists of: The Commission is actively monitoring the economic situation in the Member States and beyond, and is coordinating national economic responses. 2020. gadam), (COVID-19 ekonominių priemonių rinkinys. 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 small and medium-sized enterprises and mid-caps of €10 billion; Dedicated asset-backed securities purchasing programmes to allow banks to transfer risk on portfolios of small and medium-sized enterprise loans, mobilising another €10 billion of support. Manufacturing in crisis in many countries. Figure 1. Under the newly adopted Temporary Framework for state aid, farmers can now benefit from a maximum aid of €100,000 per farm and food processing and marketing companies can benefit from a maximum of €800,000. The different expectations across firms arise from the very challenges they face (Figure 10). The Temporary framework was first amended on 3 April 2020 to increase possibilities for public support to research, testing and production of products relevant to fight the coronavirus outbreak, to protect jobs and to further support the economy. Fishing and aquaculture are among the sectors most immediately impacted by the crisis. Industrial production across the globe deteriorated further in April 2020 compared to March 2020. Heterogeneous impacts, but with negative signs. In the furniture, recycling and printing industries, a large share of firms is anticipating a serious decline in profits (54 per cent), but only 16 per cent expect that they will be forced to announce drastic job cuts, which lies below the average share of firms included in the survey. On 12 October, the Commission announces the first provisional results of the Coronavirus Response Investment Initiative and Coronavirus Response Investment Initiative Plus: €8.4 billion have been mobilised through issuing grants, loans and a series of financial instruments to support the economy and, in particular, Small and Medium enterprises. The tourism ecosystem has been hit hard by the heavy restrictions on movement and travel imposed in the wake of Coronavirus outbreak. The scheme allows companies access to more affordable loans, and enables Finora Capital to develop a new product matching the specific needs of small and medium enterprises in cultural and creative sectors, develop competences in financing the cultural and creative sectors and expand into new markets. The fishing and aquaculture sectors are eligible for support under the new Temporary Framework for State aid, the Coronavirus Response Investment Initiative and under the European Maritime and Fisheries Fund. The views expressed in this article are those of the authors based on their experience and on prior research and do not necessarily reflect the views of UNIDO (read more). Figure 11. A specific focus of the new financing will be on investments into innovation, digitalisation and climate change mitigation and adaptation. Firms in the textile, apparel and leather industries tend to anticipate the largest plunge in profits and jobs, while firms in the chemical, plastic and rubber industries expect below average decreases (Figure 9). Cumulative COVID-19 infections per 100,000 population extracted from the European Centre for Disease Prevention and Control. Figure 2. Utilizarea fiecărui euro disponibil, prin orice modalitate posibilă, pentru a salva viețile și mijloacele de trai), (Opatrenia v reakcii na koronavírus Využijeme každé dostupné euro všetkými možnými spôsobmi na ochranu životov a živobytia), (Odziv na koronavirus. For example, according to a recent report of the. Every year the EU supports more than 200,000 businesses. The UNIDO firm survey (covering Malaysia, Mongolia, Pakistan and Thailand) (see Section 2) also asked firms to indicate how useful the support measures provided by the government have been. South Africa, India, Mexico, France and Italy are the five countries that suffered the highest reductions in trade volume over that period. The Social Bond Framework is meant to provide investors in these bonds with confidence that the funds mobilised will serve a truly social objective. The June 2020 Global Economic Prospects looks beyond the near-term outlook to what may be lingering repercussions of the deep global recession: setbacks to potential output—the level of output an economy can achieve at full capacity and full employment—and labor productivity. Wykorzystanie każdego dostępnego euro w celu ratowania życia i ochrony źródeł utrzymania), (Resposta à crise do coronavírus. Source: UNIDO elaboration based on our Statistic Data Portal. To fill this gap, UNIDO is piloting firm-level surveys across manufacturing firms in several emerging economies in Asia. Table 2. As the circumstances and impacts of the COVID-19 pandemic are continuously changing, the interpretation of the information presented here may also have to be adjusted in terms of relevance, accuracy and completeness. Dow futures hold solid gains Friday after employment report shows 245,000 jobs created in November, unemployment at 6.7% Published: Dec. 4, 2020 at 8:34 a.m. The Autumn Forecast projects that the euro area economy will contract by 7.8% in 2020 before growing 4.2% in 2021 and 3% in 2022. To ensure the continued production of healthy and safe European foods, the Commission proposed a range of concrete measures to ensure that farmers and other beneficiaries can get the support that they need. This proposal brings overall financial support proposed under SURE to a total of €90.3 billion and covering 18 Member States. On 14 December, the Commission found the creation of a €25 billion Pan-European Guarantee Fund managed by the European Investment Bank to support companies affected by the coronavirus outbreak to be in line with EU state aid rules. Share of countries (%) registering a decrease in industrial production over the period March – April 2020 in different industries, Trade losses for nearly all high- and lower income countries in March – April 2020. This will provide further flexibility to producer organisations in the implementation of their programmes.  The surveys were implemented with the support of the Regional Division of Asia and the Pacific and UNIDO field offices in the respective countries and were carried out in cooperation with the following partners: Afghanistan: Chamber of Commerce and Industries for Women; Chamber of Industries and Mines; Ministry of Industry and Commerce; Cambodia: Ministry of Economy and Finance, Ministry of Industry, Science, Technology and Innovation, The Cambodia Investment Board of the Council for the Development of Cambodia, Garments Manufacturers Association in Cambodia, European Chamber of Commerce in Cambodia, Cambodia’s Rice Federation, Young Entrepreneurs Association of Cambodia, Cambodia Women Entrepreneurs Association, UN Resident Coordinator’s Office, UN Economic Impact Group; Malaysia: Ministry of International Trade and Industry, United Nations Global Compact Malaysia Chapter and Federation of Malaysian Manufacturers; Mongolia: Ministry of Food, Agriculture and Light Industry; Mongolian Association of Leather Industry; Mongolian Wool Textile Association; National Association of Mongolian Agriculture Cooperatives; Mongolian Meat Association; Mongolian Food Industry Association; Pakistan: Ministry of Industries and Production; Small and Medium Enterprise Development Authority (SMEDA); PRGMEA; PFMA; PAPAAM; SIMAP; STAGL; Thailand: Ministry of Industry, Industrial Estate Authority of Thailand and Federation of Thai Industries; Viet Nam: Vietnam Industry Agency, Ministry of Industry and Trade and Agricultural Product Processing and Development Department, Ministry of Agriculture and Rural Development. At the same time, the coronavirus outbreak is a major shock for the European and global economies. On 16 March, the European Investment Bank Group proposed a plan to mobilise up to €40 billion in financing. Material assistance needs to go hand in hand with social inclusion measures, such as guidance and support to help people out of poverty. President Rodrigo Roa Duterte (ACE MORANDANTE/PRESIDENTIAL PHOTO/MANILA BULLETIN) The President however admitted that labor productivity and employment … ET Fresh primary data collected by UNIDO in several Asian countries provides some preliminary evidence on the pandemic’s impact on firms. It also adopts a more tailored approach by providing young people, in particular vulnerable ones, with guidance especially suited to their individual needs and the green and digital transition of our economies. On 21 October, the European Commission issued a €17 billion inaugural social bond under the EU SURE instrument to help protect jobs and keep people in work. On 13 November, the Commission has presented a proposal to the Council for a decision to grant €2.5 billion in financial support to Ireland under the SURE instrument. Note: The values in brackets represent the share of firms in the industry that reported this particular problem. The transaction benefits from the support of the European Fund for Strategic Investments, the central pillar of the Investment Plan for Europe, in which EIB Group and the European Commission are strategic partners to strengthen the competitiveness of the European economy. Of more than 50 economists polled by Reuters, some forecast the world economy will shrink as much as 6% in 2020. These are set out in the Communication on a Coordinated economic response to the coronavirus outbreak of 13 March 2020. The impact of COVID-19 in terms of cumulative incidences in these countries per 100,000 population differed considerably across the countries surveyed (Figure 7, Panel a). This allows more targeted aid to companies that demonstrably need it. The economic impact of the 2020 coronavirus pandemic in India has been largely disruptive. We delivered,” said President Ursula von der Leyen. The European Commission provides strategic funding for initiatives and operations aimed at mitigating the economic effects of the coronavirus and to save lives across the world. Flexibility under State aid rules allows Member States to introduce schemes, such as guarantee schemes for vouchers and further liquidity schemes, to support companies and to ensure that reimbursement claims caused by the coronavirus pandemic are satisfied. The new Framework does not replace, but complements the many other possibilities already available to Member States in line with State aid rules. This means that the total national support that can be granted per farm adds up to €120,000 (or €125,000) under the temporary framework. Figure 12. While Pakistan and Afghanistan reported over 80 cases per 100,000 population, Thailand, Cambodia and Viet Nam had fewer than five cases. Together this amounts to 7.3% of euro area GDP. The results of the UNIDO firm survey (see Section 2) also highlight the importance of government capacity for swift and effective responses to shocks. COVID-19 Crisis: Economic Stimulus Packages and Environmental Sustainability Poonam Mulchandani Carbon emissions across the world have dropped after economic activities came to a … “As in any crisis, when our industrial and corporate assets can be under stress, we need to protect our security and economic sovereignty,” Commission President Ursula von der Leyen said. This is the second step in the 2021 European Semester cycle, which started in September with the publication of the Annual Sustainable Growth Strategy. The IMF is calling on countries to implement green recovery plans when elaborating the structural reforms necessary for further macroeconomic development. The economic crisis unleashed by the outbreak of COVID-19 is hurting economies, regardless of income level. L-użu ta' kull euro disponibbli b'kull mod possibbli għall-ħarsien tal-ħajja u tal-għajxien ta' kuljum), (Coronavirus: EU-respons . A comparison between April 2020 and March 2019 as well as between March 2020 and March 2019 shows similar results (an increase in the average decrease in IIP and in the number of countries affected). The Commission's Opinions therefore look especially at whether the planned supportive budgetary measures for 2021 are temporary and if not, whether offsetting measures are planned. ), (Covid-19-talouspaketti – ennakoimattomiin menoihin varatun liikkumavaran käyttöönotto – hätätilanteen tukivälineen uudelleenaktivointi), (Ekonomiskt paket med anledning av covid-19 – utnyttjande av marginalen för oförutsedda utgifter – reaktivering av instrumentet för krisstöd inom EU), (Икономически пакет във връзка с COVID-19 — сектор на рибарството и аквакултурите), (COVID-19: Paquete económico – Sector de la pesca y la acuicultura), (COVID 19 – Ekonomický balíček – odvětví rybolovu a akvakultury), (Økonomisk pakke i forbindelse med covid-19 – Fiskeri- og akvakultursektoren), (COVID-19-Wirtschaftspaket – Fischerei- und Aquakultursektor), (COVID 19 – Majanduspakett – Kalandus- ja vesiviljelussektor), (COVID-19 – Δέσμη οικονομικών μέτρων – Τομέας αλιείας και υδατοκαλλιέργειας), (COVID-19 – Paquet économique – Secteur de la pêche et de l’aquaculture), (COVID-19 – Pacáiste eacnamaíoch – earnáil an Iascaigh agus na Talmhaíochta), (COVID-19 – Gospodarski paket – sektor ribarstva i akvakulture), (Covid-19 - Pacchetto economico - Settore della pesca e dell'acquacoltura), (Covid-19 - Ekonomikas pakete - Zvejniecība un akvakultūra), (COVID-19 ekonominių priemonių rinkinys. This result is consistent with the findings of the, The UNIDO firm survey (covering Malaysia, Mongolia, Pakistan and Thailand) (see Section 2) also asked firms to indicate how useful the support measures provided by the government have been. Differences are observed across countries, industries and firm size. In this context, the Commission will: The Commission approves through urgent procedures state aids cases 7 days a week. As New Jersey Governor Phil Murphy said, we need to avoid “throwing gasoline on the fire.” Meanwhile, acting to… First update: “The catchphrase may be uncertainty, but the losses are real", published on 20 April 2020 . It continued declining in 90 per cent of the countries included in our sample, with an average drop of 15 per cent within one month. €3.8 billion been used to invest in healthcare to purchase vital machinery and personal protective equipment to save the lives of EU citizens. The Commission has mobilised more than €400 million to boost global preparedness, prevention and containment of the virus inside and outside Europe. Aside from some country-level efforts to analyse the effects of the crisis on firms (most notably, the specific module on COVID-19 included in the 2020 ESIEC of Peking University), it is difficult to find manufacturing enterprise-level data that can be analysed and compared across different countries. It is not a matter of simply pulling a switch that turns on the lights. Commission Autumn 2020 Economic Forecast. Expected impact of COVID-19 on firms’ profits and employment, by firm size. Figure 10. Indeed, certain infrastructure investments and direct support to citizens, fall outside State aid rules altogether and many measures do not need to be notified since they fall under block exemptions; provide guidance to Member States as regards the flagship investment projects, including by providing templates; and. Even minor public health events can severely affect firms in lower income countries due to their poor socio-economic conditions (vulnerability) and their weak capacity to respond to crises (resilience). The coronavirus outbreak constitutes a challenge for the European economy and the livelihoods of citizens. Before the outbreak of the novel coronavirus, the US economy look… The forecast projects the unemployment rate in the euro area to rise from 7.5% in 2019 to 8.3% in 2020 and 9.4% in 2021, before declining to 8.9% in 2022. The coronavirus crisis represents a very large shock for the global and EU economies, with very severe economic and social consequences. On 6 July, the European Commission adopted an additional package of exceptional measures to support the wine sector, one of the hardest hit-agri food sectors, and alleviate the consequences of the coronavirus crisis. The Fund is expected to mobilise up to €200 billion of additional financing to support mainly small and medium-size enterprises affected by the outbreak in the 21 participating Member States. The list sets out concretely how different market participants can support citizens and businesses throughout the crisis. In an interim update to the US […] European Semester 2021. The European Commission has set up the Coronavirus Response Investment Initiative to help Member States fund their coronavirus crisis response. On 14 December, the Commission found the creation of a €25 billion Pan-European Guarantee Fund managed by the European Investment Bank to support companies affected by the coronavirus outbreak to be in line with EU state aid rules. Two major challenges widely reported by firms are 1) the contraction in demand, and 2) the payment of wages. 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