June 03, 2020 |
Today, the Commission launches the second-stage consultation of European trade unions and employers’ organisations on how to ensure fair minimum wages for all workers in the European Union. This follows the first-stage consultation which was open from 14 January to 25 February 2020, to which the Commission received replies from 23 EU-wide social partners. Based on the replies received, the Commission concluded that there is a need for further EU action. Already a political priority for the von der Leyen Commission, recent events have further cemented demand for EU efforts to reduce rising wage inequalities and in-work poverty.
The EU has been particularly hit by the coronavirus pandemic, with negative effects on Member States’ economies, businesses, and the income of workers and their families. Ensuring that all workers in the EU earn a decent living is essential for the recovery as well as for building fair and resilient economies, and minimum wages have an important role to play.Minimum wages are relevant both in countries relying solely on collectively agreed wage floors and in those with a statutory minimum wage.
Minimum wages that are appropriately negotiated with social partners, complied with and updated can:
• Provide vulnerable workers with a financial buffer in case of hard times
• Create greater incentives to work, thereby improving productivity
• Reduce wage inequalities in society
• Increase domestic demand, and the resilience of the economy
• Help close the gender pay gap
When set at adequate levels and taking into account economic conditions, they support vulnerable workers and help to preserve both employment and the competitiveness of firms.
The Commission does not aim to set a uniform European minimum wage, nor to harmonise minimum wage setting systems. Any possible measure would be applied differently depending on the minimum wage setting systems and traditions of the Member State, in full respect of national competencies and social partners’ contractual freedom.
The second-stage consultation document sets out possible avenues for EU action to ensure that minimum wages are set at adequate levels and protect all workers. Collective bargaining has a critical role to play, as underlined by social partners’ replies to the first-stage consultation. Therefore, the EU initiative would aim to ensure that:
• Well-functioning collective bargaining in wage-setting is in place;
• National frameworks allow for statutory minimum wages to be set and regularly updated according to clear and stable criteria;
• Social partners are effectively involved in statutory minimum wage setting to support minimum wage adequacy;
• Minimum wage variations and exemptions are eliminated or limited;
• National minimum wage frameworks are effectively complied with and monitoring mechanisms are in place.
Social partners are invited to respond to the questions in the consultation by 4 September 2020. This includes what sort of instrument would be most appropriate. The Commission is considering both legislative and non-legislative instruments, i.e. a Directive in the area of working conditions, and a Council Recommendation.
In light of the current circumstances related to the coronavirus pandemic, and to grant social partners sufficient time to submit their replies, this period is longer than in previous consultations.
The next step to this second stage consultation is either negotiations between social partners with a view to concluding an agreement under Article 155 of the Treaty on the Functioning of the EU (TFEU) or the presentation of a proposal by the European Commission.
Members of the College said:
Valdis Dombrovskis, Executive Vice-President for An Economy that Works for People, said: “As we work towards inclusive recovery from the coronavirus crisis, we want to make sure that all workers in the EU are protected by a fair minimum wage, allowing them to earn a decent living wherever they work. Social partners play a crucial part in negotiating wages nationally and locally, and should be involved is setting minimum wages both in countries relying solely on collectively agreed wage floors and in those with a statutory minimum wage.”
Nicolas Schmit, Commissioner for Jobs and Social Rights, said: “One in six workers are classified as low-wage earners in the EU, and the majority of them are women. These workers kept our societies and economies alive when all else had to stop. But paradoxically, they will be hit the hardest by the crisis. Work towards an initiative on minimum wages in the EU is an essential element of our recovery strategy. Everyone deserves a decent standard of living.”
Background
In her Political Guidelines, President von der Leyen pledged to present a legal instrument to ensure that all workers in the Union are protected by a fair minimum wage, allowing for a decent living wherever they work.
As part of the Communication on a Strong Social Europe for Just Transitions, the Commission launched the first-stage consultation of social partners on how to ensure fair minimum wages for all workers on 14 January 2020. The first-stage consultation ended on 25 February and the Commission received 23 replies from European social partners representing trade unions and employers’ organisations at EU level.
After considering the views expressed by the social partners in the first-stage consultation, the Commission has concluded that there is a need for EU action. Therefore, the Commission is now launching the second-stage consultation of the social partners, in accordance with Article 154(3) of the Treaty on the Functioning of the European Union (TFEU).
There will not be a one-size-fits-all minimum wage. Any potential proposal will reflect national traditions, whether collective agreements or legal provisions. Some countries already have excellent systems in place. The Commission wishes to ensure all systems are adequate, have sufficient coverage, include thorough consultation of social partners, and have an appropriate update mechanism in place.
This initiative would support the implementation of Principle 6 of the European Pillar of Social Rights on wages, which is a shared responsibility of Member States, social partners and EU institutions. The Commission launched a broad discussion on a future Action Plan to fully implement the European Pillar of Social Rights, to be presented in early 2021. The Commission invites all stakeholders to present their views by November 2020. A dedicated website called “Have your say on reinforcing Social Europe” has been created to collect feedback.
For More Information
Second-stage consultation of social partners on Fair Minimum Wages in the EU
First-stage consultation of social partners on Fair Minimum Wages in the EU
Communication: a Strong Social Europe for Just Transitions
Have your say on reinforcing Social Europe
Compliments of the European Commission.

May 27, 2020 | Speech by Ursula von der Leyen
“Check against delivery”

Mr President,
Honourable Members,
Europe is a story about generations.
And each generation of Europeans has its own story.
For our Union’s founding generation, the story was about building a lasting peace where there was only suffering, pain and destruction.
For the generation that followed, it was about pursuing prosperity and freedom by choosing the unity of our single market and our single currency.
Our next story was about reuniting our European family by bringing our brothers and sisters back in from the cold and welcoming them home – to the heart of our Union.
All those generations, and all those historic achievements, were built on the ones before and inspired the ones after.
For each generation, the choice has always been a choice between taking the path of least resistance alone or moving forward together – with vision and ambition –towards the same destination.
At these decisive moments, we have always opted to take a leap forward together.
Since the boldest measures will always be the safest for Europe.
This is what has enabled us to build a Union of peace and prosperity without peer or precedent anywhere in the world.
 
Honourable Members,
Today, we face our very own defining moment.
What started with a virus so small your eyes cannot see it, has become an economic crisis so big that you simply cannot miss it.
Our unique model built over 70 years is being challenged like never before in our lifetime or in our Union’s history.
The common European goods we have built together are being damaged.
Things we take for granted are being questioned. There is the Single Market that needs to recover. There is the playing field that needs to be made even again. And there are four freedoms that need to be fully restored.
The crisis has huge externalities and spillovers across countries. None of that can be fixed by any single country alone. A bankrupt company in one Member State, is a reliable supplier gone for a business in another. A struggling economy in one part of Europe, weakens a strong economy in another part.
This is about all of us. And it is way bigger than any of us.
This is Europe’s moment.
We see the economic, fiscal and social fall-out across our Member States.
Divergences and disparities widen.
Complex questions of sovereignty and burden-sharing have to be balanced.
And so in front of us once again is that same binary choice.
We either all go it alone; leaving countries, regions and people behind, and accepting a Union of haves and have-nots, or we walk that road together.
We take that leap forward.
We pave a strong pathfor our people and for the next generation.
For me, the choice is simple.
I want us to take a new bold step together.
Europe is in a unique position to be able to invest in a collective recovery and a common future.
In our Union, people, business and economies depend and rely on each other.
In our Union, cohesion, convergence and investment are good for all.
And in our Union, we know that the boldest measures truly are the safest for our future.
This is why the Commission is today proposing a new recovery instrument, called Next Generation EU – worth EUR 750 billion.
It will sit on top of a revamped long-term EU budget of EUR 1.1 trillion.
Next Generation EU – together with the core MFF – sums up to EUR 1.85 trillion in today’s proposals.
It goes alongside the three safety nets of EUR 540 billion in loans, already agreed by Parliament and Council.
In sum, this would bring our recovery effort to a total of EUR 2.4 trillion.
 
Honourable Members,
Allow me to explain how Next Generation EU will work.
The money will be raised by temporarily lifting the own resources ceiling, to allow the Commission to use its very strong credit rating to borrow money on the financial markets.
This is an urgent and exceptional necessity for an urgent and exceptional crisis.
This is why Next Generation EU will:
Invest in repairing our social fabric,
Protect our Single Market.
Help rebalance balance sheets across Europe.
And while we are doing this, we need to press fast-forward towards a green, digital and resilient future.
This is the future of Europe’s next Generation.
This generation that is globally connected and feels responsible for our world, our planet.
With a clear vision to promote human dignity and the rule of law.
Determined to hold governments more accountable for fighting climate change and saving our nature.
Driven by idealism for Europe and a belief that our Union must strive for better.
So, beyond showing solidarity to overcome the crisis of today, I propose a new Generational Pact for tomorrow.
Yes, the effects of this crisis mean that we need to make investments on an unprecedented scale today.
But we will do it in a way that Europe’s next generation will reap the benefits tomorrow.
Investments that will not only preserve the outstanding achievements of the last 70 years, but that will ensure that our Union is
climate neutral
digital
social
and a strong global player also in the future.
To make this happen, Next Generation EU will direct its massive financial firepower to invest in our common priorities through European programmes.
I am always keen to ensure that this House has its full say on crucial decisions for our Union.
My proposal to invest these funds via programmes in our European budget achieves exactly that.
 
Next Generation EU will restore and rebuild our Single Market – that great generator of innovation, prosperity and opportunity.
All Member States need to invest in technologies that will spark the recovery through new innovation and clean industries.
Next Generation EU strengthens the European Green Deal and Horizon Europe – and will invest in key infrastructure from 5G to housing renovation.
At the same time, we must ensure that the transition to a climate-neutral economy leaves nobody behind.
Next Generation EU will therefore multiply the funding for the Just Transition Fund.
In the same vein,no Member state should have to choose between responding to the crisis or investing in our people.
No Member state should have to choose between responding to the crisis or investing in our people.
Therefore, Next Generation EU increases Erasmus and Youth employment support.
It makes sure that people get the skills and the training and the education they need to adapt to this rapidly changing world.
Next Generation EU will help those perfectly healthy companies that have made the right decisions and investments over decades – but that find themselves at risk now because competitors in other Member States have better access to public or private money to get fresh capital.
It will invest in key European industries and technologies to make crucial supply chains more resilient.
It will ensure Europe remains cutting-edge in key areas like Artificial Intelligence, precision farming or green engineering.
And Next Generation EU will help make our health systems more resilient for future crises.
This investment will be a new European common good.
It will show the true and tangible value of being part of the Union.
And it will be owned by us all.
In total, the Commission will raise EUR 750 billion for Next Generation EU.
Of that total, EUR 500 billion will be distributed in grants and EUR 250 billion in loans passed on to Member States.
 
Honourable Members,
Let me be clear: These grants are a joint investment in our future. They have nothing to do with the past debts of the Member States.
They will be channelled through the European budget. And this will limit each country’s contribution according to a fixed formula.
The grants will be clear investments in our European priorities: Strengthening our digital single market, European Green Deal and resilience.
And the EU budget has always comprised grants. This is nothing new. Grants for targeted investment and reforms, for more cohesionand for convergence of living standards in Europe.
And our European Union is living proof that it works. This Union that has increased prosperity and living standards in every Member State. And investments made through the EU budget have paid off for all – many times over!
And that is exactly what Next Generation EU will do for all of us.
We are investing together in Europe’s future – and will pay everything back according to a known and well-tested formula through future EU budgets.
This is why the Commission will additionally propose a number of new own resources. These could be based on the planned extension of the emissions trading scheme. These could be based on a C02 border tax to counterbalance imports of cheap products from abroad which damage the climate. And these could also be based on a new digital tax.
Here we need to be ambitious and I am counting on your support.
 
Honourable Members,
Now is the time to take the right decision.
To those who fear the cost of investment, I say that the cost on inaction will be much more expensive down the road.
Together we must lay the foundations for our future. And we must make sure that our response lives up to this clearly defined, accidental and truly extraordinary crisis.
So I say let’s put our old prejudices to one side. And let’s rediscover the power of the idea of a united Europe.
The crisis we have to tackle is enormous.
But it is also huge opportunity for Europe. And it is a huge responsibility for us to do the right in this defining moment.
We can now lay the cornerstone for a Union which is climate neutral, digital and more resilient than ever before.
Seventy years ago our founding fathers and mothers took the first courageous step to create a Union of peace and prosperity.
Today is the time to write our generation’s chapter to the story and take another courageous step towards a stronger Union.
We owe it to future generations.
Long live Europe!
Compliments of the European Commission.

Together with our members we are creating a Video series of first-hand accounts of the Pandemic’s impact, both personally & professionally.
We invite you to join us today for a first-hand look at the impact of the global shutdown following the Coronavirus (COVID-19) outbreak – Today we are featuring Maxime Ros, CEO, @Revinax a EACCNY member.The questions we asked our members for this series are:1) What are some challenges you, personally and your organization have faced?2) What are some of the most surprising (positive, innovative) responses/changes you have witnessed?3) How will this experience change us going forward, as a society and in terms of how we do business?

 EACCNY has its finger on the pulse of how this worldwide pandemic is effecting companies and organizations on both sides of the Atlantic. EACC is where Americans & Europeans connect to do business.
Stay tuned for more on this series! We hope you enjoy these short vignettes our members and friends of the EACC created to share their experience.

May 14, 2020 |
With the current fast-changing developments, policy makers need to know what is happening to the economy in real time, but they often must settle for data telling them what happened many weeks ago. And international trade, which links countries through a complex web of supply chains, is an area where timely information is especially valuable from a global perspective.
Most trade takes place by sea, and—for navigational safety purposes—virtually all cargo ships report their position, speed, and other information many times a day. A new IMF methodology using these data can help better inform us how international trade is affected by the COVID-19 pandemic.
Building on machine-learning techniques, we can provide better answers to simple questions such as: How big is the drop in trade activity? Should it be attributed mostly to exports or to imports?
A new approach
Using over one billion messages from ships over a period of five years, the newly-developed methodology closely replicates official trade statistics for many countries and for the world in aggregate. It is available at a daily frequency in real time, while official statistics are typically delayed by many weeks. At the global level, our indicators built from ships’ radio signals closely approximate monthly official trade statistics (with a correlation of nearly 0.9 in levels, and around 0.4 in quarter-on-quarter growth rates).
The top panel of our Chart of the Week shows a dramatic fall in Chinese exports in the wake of initial lockdown measures to contain the spread of the virus. Exports resumed in early to mid-March, though in late-April the recovery remained incomplete and showed renewed signs of weakness.
CONTINUE READING…
AUTHORS:
• Diego Cerdeiro, Andras Komaromi, Yang Liu, and Mamoon Saeed
Compliments of the IMF.

May 30, 2020 | Statement by the President of the Commission Ursula von der Leyen and High Representative/ Vice-President Josep Borrell
As the world continues to fight the COVID-19 pandemic, the main task for everyone is to save lives and contain and mitigate this pandemic. The European Union continues to support the WHO in this regard and has already provided additional funding.
In an EU-led resolution adopted by consensus on 19 May at the World Health Assembly, all WHO Member States agreed to initiate, at the earliest appropriate moment, an impartial, independent and comprehensive evaluation to review lessons learnt from the international health response to the coronavirus, notably with the objective of strengthening future global health security preparedness.
Evaluating our global response is necessary as there are lessons to be learnt from this pandemic, its outbreak and response to it. The evaluation of our collective performance at international level is only a necessary process, aiming at strengthening health security.
Global cooperation and solidarity through multilateral efforts are the only effective and viable avenues to win this battle the world is facing. The WHO needs to continue being able to lead the international response to pandemics, current and future. For this, the participation and support of all is required and very much needed. In the face of this global threat, now is the time for enhanced cooperation and common solutions. Actions that weaken international results must be avoided. In this context, we urge the US to reconsider its announced decision.
Compliments of the European Commission.

May 29, 2020 |
Why do we need InvestEU for the post-coronavirus recovery?
InvestEU is the EU’s proposed flagship investment programme to kick-start the European economy. It is well-placed to provide long-term funding and to support Union policies in the recovery from a deep economic and social crisis. This has been shown with the successful implementation of the European Fund for Strategic Investments and other EU financial instruments in the wake of the past financial crisis.
In the current coronavirus crisis, the market allocation of financial resources is not fully efficient and perceived risk impairs private investment significantly. Deep uncertainty currently compromises the quality of financial market information and lenders’ ability to assess the viability of companies and investment projects. If left unchecked, this can create pervasive risk aversion towards private investment projects and contribute to a ‘credit crunch’. Under such circumstances, the key feature of InvestEU of de-risking projects to crowd in private finance is particularly valuable and should be utilised.
An enhanced InvestEU programme thanks to Next Generation EU will be able to provide crucial support to companies and to ensure a strong focus of investors on the Union’s medium- and long-term policy priorities, such as the European Green Deal and the digitalisation transition and greater resilience. To address all of these challenges, the Commission is updating its original InvestEU proposal from 2018 to make sure it can better respond tothe current economic crisis.
What are the main changes to InvestEU?
The new proposal contains two main changes to the InvestEU Programme as partially agreed between co-legislators in April 2019:
• An increase of the InvestEU budget to reflect the higher investment needs and an environment of increased risk. The financial envelope for the sustainable infrastructure window is doubled, in line with the President’s Communication “Europe’s moment: Repair and Prepare for the Next Generation”.
• A broadened scope through the addition of a fifth window – the strategic European investment window – in order to cater for the future needs of the European economy and to promote and secure EU strategic autonomy in key sectors.
What will the new strategic European investment window finance?
The outbreak of the pandemic has shown the interconnectivity of global supply chains and exposed some vulnerabilities, such as the over-reliance of strategic industries on non-diversified external supply sources. Such vulnerabilities need to be addressed, to improve the Union’s emergency response as well as the resilience of the entire economy, while maintaining its openness to competition and trade in line with its rules. The new strategic European investment windowwill focus on building stronger European value chains in line with the strategic agenda of the Union and the New Industrial Strategy for Europe, as well as supporting activities in critical infrastructure and technologies
This reinforcement is of particular importance in the post-crisis situation, as some Member States might not have sufficient financial capacity to support these projects with national State aid. Moreover, many of these projects are cross-border and require a European approach.
How will the new window complement the pre-existing windows?
In the current context, the strategic European investment window would bring value added to the original windows, as it focuses on recipients or projects based on their high European strategic importance.
The new window would both target specific projects (e.g. supporting large consortia or public-private partnerships aimed at developing a specific technology and building critical infrastructure) and provide diffused financing, for instance by supporting the emergence of whole ecosystems of entrepreneurs active in the targeted sectors (e.g. innovative SMEs working on technologies of potential relevance to industrial biotechnology and pharmaceuticals).
The additionality requirements under this window would also differ from those envisaged for the other windows. For instance, the additionality of the support under the new window to large corporates would be in maintaining and developing their production within the Union or under the control of European investors and in scaling up the deployment of innovative technologies, rather than in purely risk-related considerations of the InvestEU support.
What are the changes in budgetary terms[1]?
The new proposal foresees an increase of the original financial envelope. This includes a doubling of the guarantee amount allocated to the sustainable infrastructure window under the InvestEU Fund as well as the allocation of an additional guarantee amount to the new window. More concretely:
• Sustainable infrastructure window: €20 bn• Research, innovation and digitisation window: €10 bn
• SME window: €10 bn
• Social investment and skills window: €3.6 bn
• Strategic European investment window: €31 bn
The new proposal also foresees an increase of the financial envelope allocated to the InvestEU Advisory Hub by an amount of €200 million to cater for the needs of the new window as well as the increasing needs of the other four windows.
How will InvestEU work?
The main principle of how InvestEU will function does not change. The InvestEU Fund will mobilise public and private investment through an EU budget guarantee of €75 billion that will back the investment projects of implementing partners such as the European Investment Bank (EIB) Group and others, and increase their risk-bearing capacity.
Under the new proposal, the guarantee will be provisioned at 45%, meaning that €34 billion of the EU budget is set aside in case calls are made on the guarantee. The size of the provisioning is based on the type of envisaged financial products and the riskiness of the portfolios, taking into account the experience under the EFSI and current financial instruments, as well as the likely changes in market circumstances following the coronavirus crisis.
What is the role of the EIB Group in the new proposal?
Given its role under the Treaties, its capacity to operate in all Member States and the existing experience under the current financial instruments and the EFSI, the European Investment Bank Group will remain a privileged implementing partner for the InvestEU. It will implement 75% of the EU guarantee.
The EIB Group will also play a central role in implementing advisory support under the InvestEU Advisory Hub. Moreover, it will advise the Commission and perform operational tasks in relation to the Hub.
Is the new window open to other implementing partners than the EIB Group?
Yes. The new window is open to other implementing partners than the EIB Group, including national promotional banks and institutions, as well as international financial institutions such as the European Bank for Reconstruction and Development or the Council of Europe Development Bank.
The Commission will continue the discussions with potential implementing partners to ensure a swift and efficient deployment of the instrument, which is even more crucial under the current circumstances.
Are there any changes to the InvestEU governance?
An Investment Committee composed of independent experts will remain responsible for approving the individual requests. As the Investment Committee will operate in different configurations corresponding to the InvestEU policy windows, a fifth configuration has been added to the proposal.
Are there any changes to the InvestEU eligibility criteria?
The policy areas eligible for financing and investment operations under the existing four windows remain the same as proposed and negotiated in annex II to  the InvestEU Regulation. However, for the strategic European investment window, new intervention areas are introduced, as referenced above.
In case a financing or investment operation proposed to the Investment Committee falls under more than one policy window, it will be attributed to the policy window under which its main objective or the main objective of most of its sub-projects falls. The Investment Guidelines will specify the criteria for the allocation of financial products (under which financing and investment operations will be submitted) to specific windows.
For more information
Factsheet: An enhanced InvestEU Programme and Strategic Investment Facility
Proposals: EU long-term budget 2021-2027: Commission Proposal May 2020
Compliments of the European Commission.

May 29, 2020 |
As announced by European Commission President von der Leyen on 27 May 2020, the Commission is aiming to kick-start the EU economy by incentivising private investments. The Commission today proposes a new Solvency Support Instrument, which builds on the existing European Fund for Strategic Investments, to mobilise private resources to urgently support viable European companies in the sectors, regions and countries most economically impacted by the pandemic. The Solvency Support Instrument can be operational from 2020 and will have a budget of €31 billion, aiming to unlock €300 billion in solvency support for otherwise healthy companies from all economic sectors and prepare them for a cleaner, digital and resilient future. The Commission is enhancing InvestEU, Europe’s flagship investment programme, to a level of €15.3 billion to mobilise private investment in projects across the Union. Finally, the Commission is proposing a new Strategic Investment Facility built into InvestEU, to generate investments of up to €150 billion, thanks to a contribution of €15 billion from Next Generation EU, to boost the resilience of strategic sectors, notably those linked to the green and digital transition, and key value chains in the internal market. For more details see the Q&A and factsheet on the Solvency Support Instrument; and the Q&A and factsheet on InvestEU. All legal texts related to the new MFF proposal are available here.
Compliments of the European Commission.

Together with our members we are creating a Video series of first-hand accounts of the Pandemic’s impact, both personally & professionally.
We invite you to join us today for a first-hand look at the impact of the global shutdown following the Coronavirus (COVID-19) outbreak – Today we are featuring Annika Rembe, Consul General, Consulate General of Sweden a EACCNY member.The questions we asked our members for this series are:1) What are some challenges you, personally and your organization have faced?2) What are some of the most surprising (positive, innovative) responses/changes you have witnessed?3) How will this experience change us going forward, as a society and in terms of how we do business?

EACCNY has its finger on the pulse of how this worldwide pandemic is effecting companies and organizations on both sides of the Atlantic. EACC is where Americans & Europeans connect to do business.
Stay tuned for more on this series! We hope you enjoy these short vignettes our members and friends of the EACC created to share their experience.

May 28, 2020 | By Tao Zhang, Deputy Managing Director, IMF
“As Prepared for Delivery”
I thank Minister Annamuhammedov and Ms. Elena Panova for their kind invitation to participate in this conference. It is not accidental that this conference is taking place in Ashgabat. Turkmenistan was one of the first countries to have formally accepted all Sustainable Development Goals developed by the United Nations and has been integrating these goals into its national plans for socio-economic development.
Achieving SDGs is an important priority for emerging markets and developing countries. Significant progress has already been made in the Caucasus and Central Asia region in this area. Yet there is still a lot more to be done. The COVID-19 pandemic has made the task of achieving SDGs even more urgent and challenging.
Before the COVID pandemic, we knew that financing the required scale-up of spending for reaching the SDGs was a challenge. An IMF study showed that the additional spending required for meaningful progress in the areas of health, education, and selected infrastructure was quite large. For emerging market economies, the additional annual spending reached an estimated 4 percentage points of their combined GDP in 2030, compared to 15 percentage points of GDP for low-income developing countries. Looking specifically at the CCA region, our estimates indicate that the additional annual spending required for countries represented here reach about 10 percentage points of their GDP in 2030. Substantial external resources are needed when domestic efforts—for instance, mobilizing tax revenues and enhancing spending efficiency—are not enough for financing the SDGs.
The human and economic impact of COVID 19 pandemic makes spending needs larger and SDG financing more challenging. The crisis risks setting back previous achievements in human and social developments such as equality and poverty reduction. Health and social spending needs increase as countries respond to the emergency. With revenue losses and higher debt in many countries, fiscal space is shrinking. The crisis also highlights underlying structural shortcomings in some cases such as limited social safety net to adequately protect those at a higher risk of falling into poverty and uneven access to quality public services by different groups in the population.
The COVID recovery presents opportunities to accelerate the necessary reforms for achieving SDGs. Under the current difficult circumstances, increasing the efficiency of public spending to achieve savings and ensure spending is allocated to areas where it is most needed, including health, education and infrastructure, is of crucial importance. To spend efficiently, countries must develop political and societal consensus, work on building strong institutions, and instill principles like transparency, accountability, and responsiveness. Business friendly environment must be created to engage the private sector.
The IMF, with its expertise in macroeconomic and financial issues and its global membership, supports the development efforts of its member countries and promotes global economic and financial stability. The IMF has launched a number of initiatives to support countries’ response to COVID while continuing support to member countries as they pursue the SDGs. These include increased financial support for low-income developing countries—as of May 20, we have provided more than 16 billion of SDRs via emergency financing facilities to 59 countries; bolstering support to fragile and conflict states to address their unique challenges; and enhanced policy advice and capacity building on measures to promote inclusion and sustainable macroeconomic environment.
Financing for SDG also calls for global and regional cooperation. While countries must own the responsibility for achieving the SDGs, the private sector, official development assistance, philanthropists, and international financing institutions can help accelerate the efforts to close the remaining gap.
This conference is focusing on crucial issues and is taking place at a difficult juncture. I wish the organizers and participants every success in this event.
Compliments of the IMF.