The “European Guarantee Fund” (EGF) is the main tool put in place by the European Investment Bank (EIB) Group to support the efforts of the European Union to tackle the economic consequences of the COVID-19 pandemic.

It is part of the toolbox of instruments put in place at the European level as part of a wider recovery package. Still, it has received much less public attention than the recovery funds like the NextGenerationEU put in place by the European Commission or the stimulus driven by the European Central
Bank.

The President of the EIB, Werner Hoyer, stated in May 2020 that “The economic damage done by the Covid-19 pandemic becomes more visible every day: Hundreds of thousands of small and medium-sized European companies are fighting for their survival. The Pan-European Guarantee Fund is a timely and targeted response to their urgent needs, complementing the national efforts by the Member States”.

The EIB website presents the EGF as “the protection shield for European businesses”. It is a €25 billion fund which seeks to “help businesses recover from the pandemic, hire employees and grow. By mobilising extra finance from the private sector, we aim to generate up to €200 billion for the economy”.

Under the EGF, the two main branches of the EIB Group (the EIB and the European Investment Fund - EIF) provide massive credit lines, guarantees and other complex financial instruments to commercial banks and investment funds across Europe.

A year and a half later, this factsheet seeks to explain what the European Guarantee Fund is, and the state of play. It identifies risks and challenges that the Counter Balance coalition, together with investigative researchers and journalists, uncovered as part of the research project “Recovery Watch”.