Saving the Job Creators in the Pandemic Context in Europe. The Role of Multilateral Development Banks

Abstract

Small and medium-sized enterprises (SMEs) represent the backbone of global economic development because they account for creating private initiatives, innovation, and employment. In the wake of the Coronavirus outbreak, the SMEs were strongly affected, both from the demand and supply of products and services, tightening the ability to gather financial resources in order to meet short term liquidity demands and working capital requirements. Since the onset of the COVID-19 pandemic, many governments and multilateral development banks (MDBs) have provided financial resources to SMEs in order to tackle the effects of lockdown. This paper aims to characterize and assess current measures and initiatives adopted by MDBs to support SMEs. We highlight that international financial institutions act countercyclically in securing businesses and supporting jobs. The paper underlines the importance of transparency, a correct evaluation of risks and fiscal costs, and strong governance while dealing with MDBs support.

Keywords

• coronavirus crisis
• europe
• multilateral development banks
• smes