[ad_1]
The measure would reduce the risk to the EU economy of “a significant number of insolvencies”.
Brussels is finalizing the approval of a regulation that will allow States to enter the capital of its companies, large or small and listed or not, to avoid bankruptcy in the face of the coronavirus tsunami.
The coronavirus pandemic has not only put the concept of globalization in check, it has completely disrupted the world economic order, confining the free market and unleashing protectionist temptations. The European Commission is outlining the modification of the public aid time frame to face the economic damage of Covid-19, opening the door in its latest draft of the project and which Brussels plans to approve in the coming days, to a sort of widespread nationalization of companies in trouble in Europe, listed and unlisted, large and small.
It is a radical change with respect to the original project, adopted on March 19, which was limited to facilitating the actions of the Member States in guaranteeing liquidity for companies (essentially through public guarantees for loans); granting wage subsidies; suspend or defer payment of taxes, or grant direct aid to consumers for services canceled as a result of quarantine measures.
Just three weeks later and after a first review on April 3, in which the time frame was extended so that governments could grant public aid to research and development of products linked to the fight against coronavirus, the latest draft, which Brussels intends to approve this same month of April, it already tackles unequivocally the State’s irruption in the capital of companies at risk of collapse on the pretext that this eventual nationalization of the business fabric it would reduce the risk to the EU economy of “a significant number of insolvencies”; it would help “preserve the continuity of economic activity” during the pandemic outbreak and support “the subsequent recovery.”
Great pressure
This is a 180-degree turn from the initial approach behind which there is strong pressure from the largest economies in the euro: Germany, France (in whose DNA the protectionism virus is embedded) and Italy, which in recent weeks has not They have hidden their intention to resort to nationalizations to save their emblematic companies.
In the draft of his proposal, which paddles in the opposite direction to what the community Executive has defended throughout his career, his own Commission acknowledges that “several Member States are considering taking a stake in the capital of strategic companies to ensure that their contribution to the smooth functioning of the EU economy is not compromised. “
Interestingly, Brussels stresses that if these nations (which it does not mention) acquire the shares of these companies at market prices or on equal terms with private investors, “this in principle does not constitute state aidItaly, together with Spain, one of the two European countries hardest hit by the pandemic, already announced the nationalization of the airline Alitalia at the beginning of the month, while Germany, which has already come to the rescue of companies such as Adidas via loan, does not rule out taking a stake in Lufthansa airline to avoid a fatal outcome.
For its part, France, which is already a benchmark shareholder in key companies in different strategic sectors, such as the energy companies Engie and EDF, the Teleco Orange, the Renault automobile company and the Air France-KLM airline, has reiterated both actively and passively that It will do whatever is necessary to safeguard its most emblematic companies.
->
