The international community bears joint responsibility for the world’s poorest countries during this pandemic. For this reason, both temporary, immediate liquidity support and long-term measures that address the root causes of indebtedness are important in order to enable these countries to prevent a financial catastrophe on top of a humanitarian one.
For the second time over the last ten years, low-income economies are confronted with the challenge of overcoming a macro crisis they did not spark and for which they have disproportionally poor capacity to cope with compared to high-income countries. In this context, development finance institutions (DFIs) have an important role to play, both during the crisis and for the recovery.
International development cooperation risks being deeply affected by the global COVID-19 pandemic, with potentially disastrous consequences among fragile states.
As the Coronavirus pandemic expands, and peak contagion remains uncertain, policy responses are gradually emerging, being implemented in a number of domains.
The crisis has several important implications, but two are currently dominating the headlines: individual health and the sustainability of national healthcare systems, and the economic fallout from the pandemic.
With the global economy going into a steep recession, developing countries are facing considerable financing shortfalls. Confronted with its most severe crisis since WWII, Europe needs to adopt a global perspective, as it cannot successfully address it in isolation. There is a moral imperative to help vulnerable people in distress and foster global solidarity to prevent catastrophic outcomes.
The multi-annual financial framework report was based on a previous physical workshop event which took place in Paris on January 2020 and which brought together key players in France to agree on the conditions allowing to secure an ambitious budget dedicated to external action (“Heading 6”), particularly for the challenges of sustainable development in southern countries. The workshop and the report was also an opportunity to reflect on the role of the European Union’s external action policy.