For the countries of the Euro-Mediterranean region, the crisis has severely tightened external financing conditions across the income spectrum. It has disrupted trade, supply chains, investment flows, with a sharp fall in consumer and investor confidence. Most of the SMEs, including those involved in tourism, are among the economic actors first and most heavily affected by the pandemic.

The League of Arab States has reported that, at the beginning of May the pandemic had already caused an economic loss for the Arab countries estimated at 1.2 trillion dollars, in addition to 7.1 million workers at risk of losing their jobs by the end of the year.

In the first quarter of 2020, GDP in the euro zone declined by 3.6%. The latest economic forecasts, presented by the EU Commission in early May, show the economy has taken a hard hit because of the crisis. The EU economy is facing the prospect of at least a 7.4% contraction this year, which is significantly worse than the fall in 2009. This impact enormously the MENA region.

We should however be optimistic. According to Morgan Stanley estimation, published a few days ago, a sharp but short recession is expected. They expect global GDP growth will trough at -8.6% in the second quarter of 2020 and recover to 3.0% by the first quarter of 2021.

For the Algerian experience, like other countries, just at the start of this pandemic, the government began to take the necessary measures namely closing of borders, stopping of classes for schools and universities, suspension of public transport, closure of cafes, restaurants, mosques and cultural and sports activities.

• Moreover for the administration and the economic operators, it was decided the demobilization of 50% of the employees giving priority to the chronically ill and to pregnant women and those with small children to stay at home.
• In addition, the government Among other things, decided to present the complementary finance law (LFC) specifically to deal with this pandemic, where it was decided to reduce the operating budget by 50%. Education, health and civil service salaries will be spared from this measure.
• I emphasize, that these measures are accompanied by a revaluation of the guaranteed minimum wage, as of 1st of June in addition a tax exemption for the wages lower or equal to 30,000 AD.
• Now, Containment measures are starting to be alleviated, authorising certain economic activities to return to service, Of course, the economic recovery could prove to be very complex, we expect concrete support measures from the authorities depending on the financial capacity of the country to keep businesses active once the crisis has passed, in particular small companies, with a high risk of shrinking.
• Perhaps a Marshall Plan should be established by then to allow the various sectors to resume their normal activities.

For the MENA region, an effective response requires multiple key elements, such as a coordinated and comprehensive strategy to support economic activity and to prepare the ground for the recovery. This strategy should combine short, medium and long-term initiatives between all stakeholders, including among countries, cities, the public and private sectors, and of course our citizens.

Believing in the importance of regional, multifaceted and coherent cooperation to contain the pandemic and mitigate its economic consequences, PAM has worked in close coordination in the last weeks with regional and international key players to identify and share operational solutions for the recovery phase of the economic crisis caused

by the COVID.

SMEs generate more than 90% of new jobs in the Euro-Mediterranean region, both north and south. They represent 99% of businesses and employ two third of the entire active working population.

At PAM, we are convinced that improving SME’s financial inclusion in our region will help the recovery with faster economic growth, job creation, as well as contribute to social and financial stability. We are also convinced of the absolute need for an adequate fiscal and monetary efficiency to succeed in our efforts.

Last July, as part of PAM initiatives to support the economy, PAM launched the “Start-up Market project”. It consists in a digital platform, which brings together start-uppers and investors to share better structured “capital calls”, supported by clear and transparent pricing systems.

In the same context, PAM will hold a virtual meeting on 8 July 2020 to look at both the macro-economic aspects resulting from the current pandemic, and at the practical measures for enterprises. A very high-level panel of keynote speakers featuring the Minister of International Cooperation of Egypt, the Minister of Industry, Trade and Green and Digital Economy of Morocco, the President of the Italian Cassa Depositi e Prestiti and others from Partner International Institutions have been invited to address the conference.

I take this opportunity to thank Hon. Liam Byrne for having accepted the PAM invitation to be a speaker of the conference and to invite you to follow up and interact with this important event.

Thank you.

The Hon. Prof. Ammar Moussi is a member of the National People’s Assembly of Algeria and a member of the Finance and Budget Committee. He is also a permanent member of the Parliamentary Assembly of the Mediterranean (PAM).