European Commission considers risky business lending options

US, WASHINGTON (ORDO NEWS) — The European Commission has proposed new measures to support the business block. According to the source Reuters, Brussels proposes to provide companies with state loans in the amount of 5% of the 2019 turnover. Another source added that the amount of loans may be 40% of the borrower’s annual salary fund.

However, such loans are planned to be issued on strict conditions due to extremely high risks, the agency notes, in particular because such loans will be considered as subordinated debt, which will have a lower priority compared to other bonds of the issuer in case of liquidation in the process of bankruptcy.

It is the increased risks that still stop the European Commission, which continues to study the possibility of such a loan.

According to Reuters, EU authorities may not dare to take such measures, reducing the percentage of turnover and the share of the salary fund in terms of loans. As one of the agency’s interlocutors said, the idea was supported by several countries of the bloc, but not all, and Brussels wants the decision to be taken collectively.

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