The national and regional promotional banks and funding agencies, members of the EAPB, have taken measures in response to the Covid-19 crisis, fulfilling their role as counter-cyclical state instruments. About 1 trillion EUR of public support measures has been provided by national and regional promotional banks to ease the impact of the crisis on our economy and society.
Now all EU resources of the Next Generation EU and the next Multiannual Financial Framework (MFF) need to be mobilised to ensure a quick recovery while putting the European economy on a sustainable path. The agreement by the Heads of State on the creation of the Recovery Instrument, with a mix of loans and grants totaling 750 bn, is a historic move for the EU. However despite the huge costs stemming from the immediate need to recover from the COVID 19 crisis, the EU should be careful not to cut investments in those sectors which are very important for the future of the EU. It is also crucial to provide local authorities and SMEs with the funding they need in a long-term perspective.
Moreover the European financial sector will emerge from the Corona crisis with more non-performing loans and weaker capital and liquidity positions. Consequently, the normal regulatory framework should not be reintroduced without appropriate transition periods in order to allow banks that have taken advantage of the capital relief to support the real economy sufficient time to rebuild their capital.