The European Investment Bank proposed a new fund to guarantee €200 billion of loans to businesses struggling with the coronavirus.
EU governments collectively would need to put up €25 billion for the program, EIB President Werner Hoyer said in an email to finance ministers last night, obtained by POLITICO.
The ministers are due to consider the idea in a videoconference tonight, along with other efforts to tackle the coronavirus economic fallout. Europe’s governments have so far struggled to agree on a coordinated spending strategy that expands beyond their national stimulus packages and reassure investors of EU unity.
“We need an immediate pan-European response,” Hoyer wrote.
“It is a proposal based on solidarity,” he continued. “What better time to stand together than today in the fight against the virus! We do not have another day to lose.”
The fresh capital would be used to insure loans by commercial and public banks along with other credit programs. “Innovative” startups also could get cash infusions to avoid running out of money due to the crisis.
Besides putting up the money, finance ministers would need to provide guarantees for the new fund. If they agree, Hoyer said, “we could start to provide this safety net in a matter of weeks, if not days.”