Corona and financial stability 4.0: implementing a european pandemic equity fund

  • This Policy Letter presents a proposal for designing a program of government assistance for firms hurt by the Coronavirus crisis in the European Union (EU). In our recent Policy Letter 81, we introduced a new, equity-type instrument, a cash-against-tax surcharge scheme, bundled across firms and countries in a European Pandemic Equity Fund (EPEF). The present Policy Letter 84 focuses on the principles and conditions relevant for the operationalization of a EPEF. Our proposal has several desirable features. It: a) offers better risk sharing opportunities, augmenting the resilience of businesses and EU economies; b) is need-based, thereby contributing to an effective use of resources; c) builds on conditions and credible controls, addressing adverse selection and moral hazard; d) is accessible to smaller and medium-sized firms, the backbone of Europe’s economy; e) applies Europe-wide uniform eligibility criteria, strengthening support among member states; f) is a scheme of limited duration, reducing (perceived) government interference in businesses; g) creates a template for a growth-oriented public policy, aligning public and private sector interests; and h) builds on the existing institutional infrastructure and requires minimal legislative adjustments.

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Metadaten
Author:Arnoud BootGND, Elena CarlettiGND, Hans-Helmut KotzGND, Jan Pieter KrahnenORCiDGND, Loriana PelizzonORCiDGND, Marti G. SubrahmanyamORCiDGND
URN:urn:nbn:de:hebis:30:3-534475
URL:https://safe-frankfurt.de/policy-center/policy-publications/policy-publ-detailsview/publicationname/corona-and-financil-stability-40-implementing-a-european-pandemic-equity-fund.html
Parent Title (English):SAFE policy letter ; 84
Series (Serial Number):SAFE policy letter (84)
Publisher:SAFE
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2020
Year of first Publication:2020
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2020/04/26
Tag:Coronavirus; Equity fund; Financial stability; Policy measures in the EU; Risk sharing
Page Number:8
HeBIS-PPN:464018234
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF)
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License LogoDeutsches Urheberrecht