How can the European Union help developing countries address the socioeconomic impacts of the coronavirus crisis?
With the global economy going into a steep recession, developing countries are facing considerable financing shortfalls. The UN Conference on Trade and Development warns of a $2.5 trillion finance shortfall; Asian forecasts are down by 5–10 percentage points; Africa is already facing major impacts. The UN SecretaryGeneral has called for a $2.5 trillion fund for developing countries. African finance ministers have called for $100 billion. The average fiscal stimulus in Europe so far (12% of gross domestic product) is 15 times higher than in the poorer African countries (0.8%) – as the latter cannot afford it. This note discusses EU actions to support developing countries to address the coronavirus crisis.
ECDPM’s San Bilal, Head of Programme Trade, Investment and Finance and Dirk Willem te Velde, Principal Research Fellow and Director of Programme – International Economic Development Group at ODI co-authored this note.