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Solvency Support Instrument [EU Legislation in Progress]

Written by Marcin Szczepański (1st edition),

© Richard Villalon / Adobe Stock

In May 2020, the European Commission adopted a proposal on a Solvency Support Instrument. The aim is to support otherwise viable companies in the Union that face solvency difficulties as a result of the coronavirus crisis, and to mitigate possible distortions to the single market and its level playing field. Such distortions are to be expected given the differing degree to which the Member States are affected and the likely unevenness of their responses, which may depend on their fiscal capacity and level of debt. The Commission proposes to increase the guarantee provided to the European Investment Bank under the European Fund for Strategic Investments and to use it to support financial intermediaries, which will then select companies eligible for solvency help.

At the European Council meeting in July 2020, EU Heads of State or Government did not take up the idea of the solvency support instrument. Both the European Parliament and Commission President, Ursula von der Leyen, have expressed regret at this. Continuing the examination of the proposal in Parliament, the co-rapporteurs have published a draft report in which they propose to widen the scope of eligible companies and ensure fair geographical distribution.

Versions

Proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2015/1017 as regards creation of a Solvency Support Instrument
Committee responsible: Economic and Monetary Affairs (ECON)
Budgets (BUDG) jointly under Rule 58
COM(2020) 404
29.5.2020
Rapporteur: José Manuel Fernandes (EPP, Spain)
Irene Tinagli (S&D, Italy)
Nils Torvalds (Renew Europe, Finland)
2020/0106 (COD)
Shadow rapporteurs: Frances Fitzgerald (EPP), Victor Negrescu (S&D), Billy Kelleher (Renew Europe), Gunnar Beck (ID), Hélène Laporte (ID), Claude Gruffat (Greens/EFA), Henrike Hahn (Greens/EFA), Bogdan Rzońca (ECR), Johan Van Overtveldt (ECR), José Gusmão (GUE/NGL), Dimitrios Papadimoulis (GUE/NGL) Ordinary legislative procedure (COD) (Parliament and Council on equal footing – formerly ‘co-decision’)
Next steps expected: Adoption of report in joint committee

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