to adapt to the changes it has set in motion. and the mittelstand – thanks to its agility, its focus on innovation and its commitment to competing by adding value – will have to be at the heart of this process. for now, however, the pandemic is still weighing heavily on our economies, and especially on firms in the services sector. while manufacturing has recovered quite well since the first lockdown last year, buoyed by solid global demand, activity in the services sector has remained subdued owing to the social distancing measures that are still in place today. this particularly affects smes, because they make up an outsized share of firms in the sectors worstaffected by the crisis and they employ around 75 % of the people working in those sectors. [ 6 ] so it is no surprise that many smes in europe were put at risk of liquidity problems. 2 / 8 but the recession we have gone through is not a typical one. firms have been hit by a public health crisis that affects them indiscriminately, irrespective of whether they are the best or worst performers. that is why policymakers had to step in. they had to prevent an unjustified loss of capital, jobs and incomes that would have deeply damaged our economic potential. essentially, what many firms needed was a bridge to the other side of the pandemic – support to pay wages and cover bills until they can do so again themselves. so the policy response has been about putting that bridge in place. fiscal policy has rightly taken the lead, because it can be targeted at the firms and sectors most exposed to the crisis. and it has, on the whole, been effective. in germany, more than six million people were enrolled in the “ kurzarbeit ” scheme during the first lockdown last april, which was more than four times the peak during the global financial crisis. but it was also crucial that smes did not face a credit crunch at the very moment when their revenues were drying up. and for that they needed finance. just like households, entrepreneurs can be savers and investors, but also employers and borrowers that depend on access to loans. smes in particular rely on funding from banks, since they typically do not access capital markets. over the last decade, 43 % of external finance for smes in the euro area has come from bank loans – double the share for large firms. so when the lockdowns

##bilities – the net international investment position ( niip ) which includes both debt and equity liabilities, net of foreign assets – india ’ s exposure declined to 15. 9 per cent of gdp at end - march 2019 from a peak level of 18. 3 per cent at end - march 2015. foreign exchange reserves covered 76 per cent of external debt and 94. 6 per cent of the niip at endmarch 2019, up from 68. 2 per cent and 89. 3 per cent, respectively, at end - march 2014. shortterm debt by residual maturity declined to 57 per cent of foreign exchange reserves at end - march 2019 from a peak level of 59 per cent at end - march 2013. short - term debt by original maturity constitutes barely 20 per cent of total external debt. 4. these healthy developments are underpinned by the innate strength of india ’ s underlying fundamentals. the degree of openness of the economy, measured by the ratio of exports and imports of goods and services to gdp, has risen from 20 per cent in the first half of the 1990s to 44 per cent in the latest five - year period from 2014 – 19. the share of india ’ s merchandise exports in world exports has gone up from 0. 5 per cent in 1990 to 1. 7 per cent in 2018. 5. in line with the expanding share of services in domestic output, india ’ s services exports have grown rapidly over the past two decades. in fact, india ’ s services exports have shown a higher degree of resilience to global shocks than merchandise exports. at us $ 81. 9 billion, net services exports financed 45 per cent of india ’ s trade deficit in 2018 – 19. in the area of traded services, 1 / 4 bis central bankers'speeches india remains a world leader in software exports and information technology ( it ) enabled services, accounting for around 12 per cent of world software exports. india ’ s it sector, which earned us $ 78 billion through net exports in 2018 – 19, is leapfrogging into new technologies including artificial intelligence, machine learning and robotics. the indian diaspora is among the largest in the world and reflecting this, india currently receives the highest amount inward remittances in the world from indians working abroad. alongside, accretions to non - resident deposits have provided stable and reliable support to the balance of payments over the years. financial openness, measured by the ratio of gross capital inflows and outflows to gdp