As announced by European Commission President Ursula von der Leyen on 27 May, the Commission is proposing a new Solvency Support Instrument to help kick-start the European economy and overcome the severe socio-economic consequences of the coronavirus pandemic.
The Solvency Support Instrument, which builds on the existing European Fund for Strategic Investments (EFSI), will mobilize private resources to urgently support economically-viable European companies in the sectors, regions and countries most economically impacted by the coronavirus pandemic.
The Solvency Support Instrument is a temporary crisis instrument. It will help otherwise healthy companies weather the storm, protect the Single Market and strengthen cohesion across the Union, with a focus on companies in those Member States where national solvency support is more limited.
It can be operational from 2020 and will have a budget of €31 billion, aiming to unlock €300bn in solvency support for companies from all economic sectors and prepare them for a cleaner, digital and resilient future.
Margrethe Vestager, executive vice president in charge of competition policy, said: “The solvency support instrument will enable equity support to businesses all over Europe, while being focused on the member states which are least able to offer equity support themselves. And on sectors and Member States whose economies have been hardest hit by the pandemic.”
Economy Commissioner Paolo Gentiloni said:“Today we present a new tool to tackle the dangerous divergence emerging within the EU: a solvency support instrument. Working with the European Investment Bank Group, our goal is to help attract investment into firms that were healthy before the pandemic struck Europe but may now risk insolvency. The instrument is open to all Member States, but designed in such a way as to prioritise support for companies in those countries worst hit and with fewer financial resources at their disposal. Because Europe means solidarity.”
Executive Vice-President Vestager will give a press conference on this topic on 29 May at 10h CET, which can be followed live on EbS.