Nationally, the Cura Italia Decree (Dl 17 March 2020, n. 18) intervened with a series of articles in favor of export and internationalization. Among the most important measures for exporting companies is the establishment of the Integrated Promotion Fund, with an initial budget of 150 million euros for the year 2020, for the implementation of the following initiatives:
- creation of an extraordinary communication campaign in support of Italian exports and the internationalization of the national economic system in the agri-food sector and in the other sectors affected by the emergency deriving from the spread of Covid-19;
- strengthening of promotional activities of the Country System;
- co-financing of promotional initiatives aimed at foreign markets;
- granting of non-repayable co-financing up to fifty percent of the funding. The co-financing is granted within the limits and under the conditions established by the current European legislation on state aid of minor importance;
- the suspension of the payment of customs duties;
- support to the liquidity of companies that do not access the Guarantee Fund for SMEs - the sectors eligible for relief pursuant to this article will be identified with a specific ministerial decree;
- for subsidized loans granted for internationalization pursuant to the 394/81-SIMEST Fund, a suspension of up to 12 months may be ordered for the payment of the principal amount and interest on the installments due in 2020, with the consequent transfer of the amortization plan for a corresponding period.
To these contained measures must be added:
- the new catalog of services provided by the Foreign Trade Institute, many of which are free for requesting companies;
- the production and supply of medical devices and personal protective equipment (PPE) for the containment and contrast of the COVID-19 epidemiological emergency - the budget is 50 million euros.
At European level, Eurogroup Finance Ministers reached a compromise: a package of common measures for the coronavirus emergency of more than 500 billion euros, to which another could be added in the coming months for an amount that should exceed 1.000 billion. Since this was a compromise, the disagreeing parties had to give in on their initial demands. Italy and the other countries in the south of the Eurozone were clamoring for the issuance of Eurobonds, perhaps as part of the French Recovery Plan proposal. The northern countries headed by Germany and the Netherlands declared themselves open only to the use of the State-saving Fund (MES), but under the conditions set by the Fund itself. Finally, the European Commission put its own project (SURE) on the table to reduce the effects on unemployment. Here then is that the three instruments approved by the finance ministers are the ESM, the European Investment Bank (EIB) and the SURE.
The so-called State-saving Fund was created during the last financial crisis to grant loans to those states that were unable to finance themselves on the markets, or could only do so at very high costs. In recent years, the ESM has already granted loans to Cyprus (6,3 billion), Greece (61,9 billion) and Spain (41,3 billion) but in the face of strict conditionality. This means that whoever receives the loans undertakes to approve a memorandum of understanding which defines with rigorous precision what measures they undertake to take, above all in terms of deficit/debt cuts and structural reforms. The Dutch and Germans insisted on this point, while the countries of the South actually underlined the substantially different nature of today's crisis compared to the one for which the ESM and its ties had been created. The compromise provides that European countries can ask for loans from the ESM, at much lower rates than market rates and with rather long maturities, for a total amount that cannot exceed 240 billion. Each country will not be able to access credits for an amount exceeding 2% of GDP: for Italy it means that it will not be possible to go beyond 36 billion. The pact implies the use of precautionary credit lines (ECCL) on the sole condition of allocating it to health care and prevention costs related to the coronavirus. A time limit is also set: access to the MES in these ways will only be possible for the duration of the emergency. If you do it later, the more severe conditions will be restored.
The second instrument on which the ministers agreed is the SURE (Support to mitigate Unemployment Risks in Emergency) strongly desired and already announced in recent days by President Von der Leyen mindful of her previous position as Minister of Labor of Germany. This mechanism will be able to unlock up to 100 billion to supplement both the Italian redundancy fund and the Kurzarbeit in Germany. To do it member states will have to provide national guarantees of up to 25 billion which will be used by the Commission to issue AAA bonds given to member countries through long-term loans. Albeit for a limited amount, this is already a first form of Eurobond with a mutualisation of the related debt: a precedent that should not be underestimated.
Finally, another 200 billion will be able to reach companies in the form of loans granted by the European Investment Bank (EIB) through the activation of a guarantee fund of 25 billion which will allow the EIB to find up to 200 billion on the markets to be in subsidized loans to businesses with an eye to SMEs.
In the opinion of ISPI analysts, if this agreement is the maximum that the national governments will be able to achieve in common, it will only be inadequate in relation to the extent of the challenges. If, on the other hand, it were to represent an intermediate stage towards a real Recovery Plan, then the judgment would be positive: finally the solidarity implementation of a first package of urgent measures to deal with the emergency.
