Competition commissioner Margrethe Vestager explained on Friday a €31 billion support instrument that is part of the EU's proposed recovery plan.
The plan aims to support businesses which, although viable, are experiencing serious solvency problems due to the coronavirus crisis. One of the objectives is to rebalance competition.
This temporary tool, called the Solvency Support Instrument (SSI), could be put into operation this year.
It would seek to mobilise up to €300 billion of private capital by granting a Union guarantee to the European Investment Bank (EIB).
- Coronavirus: Belgium receives €5,5 billion from EU recovery fund
- European Commission puts forward €750 billion recovery plan
Many states have already intervened in the crisis by providing solvency guarantees to companies on their territory.
This has led the Commission over the last two months to validate a large amount of state aid after having relaxed the rules in this area, but it soon became clear that not all European economies could intervene as much as the strongest among them.
Germany alone, for example, accounts for almost half of the amount of state aid that the Commission validated. Although the aid to German companies would impact their customers in other Member States, this threatens fair competition.
The SSI, for its part, will give priority to companies in the sectors and Member States most economically affected by the pandemic as well as in states where public support for solvency is more limited.
The Commission will decide, and the Member States will not be involved in the decision-making process.
The instrument will also focus on the ecological and digital transitions, which are EU priorities, and on support for cross-border economic activities.
The Brussels Times