The European Commission authorised, on Friday 31 July, a Spanish plan to set up a fund (the Solvency Support Fund) with a budget of €10 billion to invest through debt and equity instruments in companies operating in Spain, in the context of the Covid-19 pandemic. The measure has been authorised under the Temporary Crisis Framework.
The Commission found that the measure taken by Spain was in line with the conditions laid down in the Temporary Framework. As regards recapitalisation measures, in particular, support is available to companies only if there is no other appropriate solution and if it is in the common interest to intervene.
The scheme provides for an adequate remuneration for the State and provides an incentive for the beneficiaries and/or their owners to repay the support as soon as possible (through, inter alia, a ban on dividends and a ban on the payment of bonuses to management). In addition, any aid to an undertaking above the €250 million threshold must be notified separately for assessment on a case-by-case basis.
Green light for Italian aid
In addition, the Commission approved three Italian schemes with an overall budget of €6 billion, consisting mainly of recapitalisation incentives by private investors in favour of SMEs whose activities are affected by coronavirus. These measures complement each other and are designed to encourage the mobilisation of private investment: a subsidy combined with a tax credit, a tax credit system (companies benefit from a tax credit of up to 30% of the amount of their capital increase) and subordinated loans. (Original version in French by Lionel Changeur)