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    Beyond its toll on human lives, the COVID-19 pandemic induced one of the worst global economic downturns since the Great Depression. Faced with severe disruptions to demand and supply chains, businesses and the public sector needed quick access to liquidity to maintain stability.

    The pandemic strained the financial resources of public authorities such as financial institutions, both at a local and regional level, as they spent more on ongoing costs and liquidity needs at short notice. It left many firms in deep debt and at risk of insolvency. In the recovery phase, their financial needs partly turned to more subordinated products, so they could invest while managing their debt burden.

    The European Investment Bank Group responded to the COVID-19 crisis by repurposing some of its existing resources, applying temporary measures to respond to needs quickly, and setting up a dedicated initiative — the Pan-European Guarantee Fund— to help the economy withstand the pandemic.

    About the report

    The Evaluation function within the EIB Group assessed the Group’s response to the COVID-19 crisis in the European Union.

    “During the emergency and recovery phases of the crisis, did the Group’s COVID-19 response reach the clients that needed help, at the right time and in the right form?”

    This rapid assessment looks at the effectiveness of the EIB Group’s response to the COVID-19 pandemic, particularly during the emergency and recovery phases of the crisis. This publication also presents lessons learned on how quickly and effectively the Group mobilised expertise and resources to address market needs during these two periods, and recommendations for future crises.

    COVID-19 response

    Both the European Investment Bank and the European Investment Fund responded swiftly to the COVID-19 crisis, deciding on tailor-made solutions and mobilising the necessary resources. Agility allowed the Group to respond on the necessary scale: its COVID-19 response has constituted a significant portion of its overall activity since April 2020.

    The EIB Group built on regular analyses from its research teams and on feedback from clients so that it could stay abreast of the crisis as it evolved.

    • The mobilisation of funds focused on supporting small and medium enterprises and mid-caps.
    • The emergency response helped clients to implement projects and maintain liquidity during the pandemic.
    • By providing banks with risk coverage and capital relief, and by reducing credit concentration, the Pan-European Guarantee Fund made it easier for European firms to access suitable financing, ensuring their growth and development in the medium and long-term.

    EIB Group COVID-19 crisis response


    While the response to the COVID-19 crisis was set up and rolled out effectively, there should have been more flexibility for the emergency support to be partially extended.

    Even so, the Bank showed flexibility by temporarily adapting some of its normal procedures to allow for the financing of non-project-related investments (working capital finance) and increasing its co-financing share.

    • The evolution of the crisis depended heavily on vaccination rollout and the containment of COVID-19 variants. Given the unpredictable nature of this crisis, managing the transition from emergency to recovery support is crucial.
    • The Bank’s decision not to prolong the emergency response beyond March 2021 was at odds with the ongoing third epidemic wave, and the growing signs of continued market need for emergency support.
    • The European Guarantee Fund had an important role to play in enhancing the Group’s relevance, but delays have partly affected its attractiveness and relevance as an emergency tool.

    Monthly evolution of EIB COVID-19 financing (approvals excluding under the EGF)

    Source EIB COVID-19 financing approvals excluding EGF: the EIB Group Evaluation function based on EIB data. For the purpose of this analysis, only the EIB’s COVID-19 operations eligible for enabling measures are presented; EGF operations were not eligible for COVID-19 enabling measures and are therefore not presented here.

    Lessons learned

    Lesson 1

    During the emergency phase of the crisis, demand for liquidity increased as firms needed to finance their working capital requirements or build precautionary liquidity buffers.

    By providing financial intermediaries with guarantees to cover the risk associated with repayment terms (postponing debt obligations, rescheduling payment dates, or credit holidays), the EIB helped banks address the most urgent liquidity needs of their clients, lowering financing constraints and the risk of supply chain disruptions.

    The EIB selectively offered a set of enabling measures that aimed to:

    • increase the volume and co-financing share of its financial support in view of growing liquidity needs;
    • encourage clients to rapidly sign and ultimately disburse the financing made available to them, to help increase and accelerate the flow of liquidity injected into the economy;
    • expand the categories of expenditure that it can finance to include working capital finance for intermediated lending and additional health-related expenses.

    These enabling measures also offered direct financing of projects, helping intermediaries mitigate the adverse effects of the crisis on project continuity by relieving the pressure on their project completion deadlines.

    Lesson 2

    Emergency requests for COVID-19-related financing aligned with the spring and autumn 2020 lockdowns. It also signalled continuous and widespread demand for a variety of its COVID-19 enabling measures throughout 2021.

    However, in December 2020, the European Investment Bank decided to prolong the availability of enabling measures for only one more quarter and to discontinue them after March 2021, except for public health sector operations.

    Amid uncertainty, the phasing-out of the crisis response should build on continuously updated analyses of the economic and financial context, and of market needs.


    Recommendation 1

    The EIB Group should consider establishing a crisis mechanism so that it can respond to crises more rapidly in the future.

    In principle, it would combine:

    • Pre-defined governance arrangements to transfer some of the coordination costs upfront, and
    • Built-in flexibility to address different types of crisis events and adjust the course of implementation as the crisis unfolds.   

    Recommendation 2

    In the recovery phase of a crisis, the EIB Group should assess the feasibility of scaling up its provision of support to small and medium-sized companies and small mid-caps.

    This should be undertaken to enable their continuing investment, especially in green and digital transformation, while preserving their solvency.