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New €10 billion fund to help Spanish companies

Updated: Mar 26, 2021


 Solvency Support Fund, European Commission
Spain notified the commission to establish a fund through the state budget to provide debt and capital support to strategic enterprises active in Spain affected by the coronavirus outbreak. PHOTO: ImageCollab

A Spanish fund called the Solvency Support Fund with a budget of €10 billion to invest through debt and equity instruments in companies active in Spain affected by the coronavirus outbreak, has been approved by the European Commission. It was approved under the State Aid Temporary Framework. Margrethe Vestager, executive vice-president of the European Commission in charge of competition policy, says the coronavirus crisis has hit the Spanish economy hard. She says the fund aims to unlock capital support to Spanish companies by facilitating their access to finance in these difficult times. “The scheme ensures the state is sufficiently remunerated for the risk assumed by taxpayers, that there are incentives for the state to exit as soon as possible and that support comes with strings attached. This includes a ban on dividends, bonus payments and further measures to limit distortions of competition,” says Vestager. According to the executive vice-president, Spain notified the commission under the Temporary Framework of plans to establish a €10 billion fund through the state budget to provide debt and capital support to strategic enterprises active in Spain affected by the coronavirus outbreak. She says under the scheme, the support will take the form of debt and recapitalization instruments. The commission has found the Spanish measure is in line with conditions set out in the Temporary Framework. With respect to recapitalization measures this includes:

· Support is available to companies only if no other appropriate solution is available and it is in the common interest to intervene