11 May 2020

Facebook Twitter

Second Amendment Temporary Framework

The Commission amended the Temporary Framework for the second time on 8 May 2020. This second amendment expands the Temporary Framework to cover recapitalisation and subordinated debt measures.

The new provisions enable well-targeted public interventions in the form of recapitalisation aid to those non-financial companies in need, to help reduce the risk to the EU economy as a whole. At the same time, the Temporary Framework sets a number of safeguards to avoid undue distortions of competition in the Single Market.

This second amendment also introduces the possibility for Member States to support undertakings facing financial difficulties due to the coronavirus outbreak by providing subordinated debt to companies at favourable terms. This concerns debt instruments that are subordinated to ordinary senior creditors in case of insolvency proceedings and complements the toolbox available to Member States under the existing Temporary Framework including to grant debt with senior ranking to companies in need.

Furthermore, the rules address the possibility for Member States to design national measures in line with additional policy objectives, such as further enabling the green and digital transformation of their economies or preventing fraud, tax evasion or aggressive tax avoidance.