supply chains. from a medium - term perspective, it is also essential to appropriately fund medical research, not only to obtain a vaccine, but also to produce effective drugs that can treat patients, reducing the number of those needing intensive care, and avoiding the most adverse health outcomes. international cooperation and coordination are key not only for the virus - suppression strategy to be successful on the global scale, but also in the aftermath, as it would be highly beneficial to support production with positive externalities. the world bank group response this unprecedented global shock risks unravelling the development gains of the past decades. limited social protection mechanisms could exacerbate the damage caused by the covid crisis to far too many workers, particularly those in informal sectors. as a result, poverty rates may climb back to levels not seen in many years. a lack of decisive policy measures can have even grimmer longer - term consequences if human capital accumulation is impaired, e. g. because of adverse nutritional outcomes for children in vulnerable households or school closures. in addition to increasing the resources available for health systems, policy strategy during the emergency must focus on supporting firms, workers and household incomes, as well as preventing liquidity problems from turning into massive defaults. besides saving lives, the top priority is to maintain the productive capacity of our economies. preserving the functionality of financial markets and stability of the financial system is a conditio sine qua non for this to work. the world bank group ( wbg ) has acted quickly to respond to the emergency created in several developing countries as a result of the shock to health systems, demonstrating that it is able to respond effectively and in a timely manner to rapidly evolving circumstances. we commend management for their targeted, timely and effective actions : we are in a situation in which choosing to save a dollar today could cost many more later on. we praise the ifc and miga ’ s decisions to provide liquidity to the business sector, either directly or through financial institutions. these interventions should be truly complementary to those of financial authorities worldwide, who are exploiting the flexibility envisaged within existing regulatory frameworks fully and contemplating how to adapt them, if needed, to contain the risk of financial instability. the size of the wbg ’ s initial response is important, but more must be done. in planning for that, it is important to strike the appropriate balance between alleviating short - term needs and maintaining longerterm development goals. this means operating with an effective

€704. 8 billion, of which €80. 5 has been paid in ; its lending capacity stands at €500 billion. in addition to having provided bilateral financial support and having participated in efsf programmes ( committing a total of almost €44 billion ), italy ’ s subscribed capital in the esm amounts to about €125 billion and its paid - in capital is more than €14 billion. each member ’ s share of the esm ’ s capital is based on the ecb ’ s capital keys, which reflect the country ’ s share in the total population and gross domestic product of the euro area. the portion of the esm ’ s capital that is subscribed but not paid in is ‘ callable ’ at any time if needed, meaning that esm members are asked to provide the corresponding funding with little advance notice. 2. esm governance and functions the esm was established by an intergovernmental agreement, outside the judicial framework of the european union. it is headed by the board of governors, which consists of the 19 ministers of finance in the euro area. unanimous approval is required for all important decisions ( including those relating to disbursements of financial assistance and the approval of memoranda of understanding with the countries that receive it ). the board of governors chooses whether it is chaired by the president of the eurogroup ( as is currently the case ) or by a president elected from within the board itself ; terms last two years and may be renewed. for the purposes of ensuring the efficacy of the esm ’ s decision - making system, the esm may operate with a qualified majority of 85 per cent of capital if, in the event of a threat to the economic and financial stability of the euro area, the european commission and the ecb ask it to make urgent decisions concerning financial assistance. the voting rights of board members correspond to the number of shares assigned to the respective countries. germany, france and italy have shares that exceed 15 per cent and, therefore, may also veto urgent decisions. the esm ’ s executive body is the board of directors, consisting of 19 members each of whom is appointed by a governor and has extensive experience in economics and finance. it is headed by the managing director who also serves as the esm ’ s legal representative. as i mentioned, the fundamental purpose of the esm is to provide financial assistance, subject to conditions, to member countries experiencing temporary difficulties in accessing the markets,