European Commission: No Dividends, Bonuses for Companies Tapping Into Coronavirus Funds

European Commission: No Dividends, Bonuses for Companies Tapping Into Coronavirus Funds

Leaked documents from the European Commission seen by the Guardian show the EU’s executive body is moving to bar companies tapping into the EU share-buying programs during the coronavirus pandemic from paying bonuses, dividends and share buybacks.

Restrictions are expected to be imposed on companies where national governments have taken equity stakes as an emergency measure to stave off bankruptcies. The rule is pending approval from the 27 Member States and would apply to the UK as well under the Brexit transition period.

For the duration of the program, companies benefitting from state aid in the form of equity stakes would equally be barred from “aggressive commercial expansion financed by state aid”, such as embarking on M&As. “Under no circumstances, bonuses, other variable or comparable remuneration elements shall be paid,” the document states.

The document comes from the EU competition commissioner Margrethe Vestager’s office and comes on the back of frantic efforts to amend swathes of EU legislation to permit state-aid during the coronavirus pandemic. Rules on providing financial lifelines to companies, normally seen as in breach of EU competition law, have already been relaxed.

The Temporary State Aid Framework, adopted on March 19th, pledges “full flexibility” on EU state aid rules in order to allow Member States take action and support businesses affected by the pandemic. The first scheme approved by the Commission was drafted by France and are expected to mobilise €300 billion of liquidity support for companies.

(Banner image: Wikipedia)

newsletter
Join our mailing list and never miss an update !
EU Left Divided Over Future With Russia

EU Left Divided Over Future With Russia

An EU summit in Brussels this past week left many questions unanswered, and a possible rise in tensions between certain member countries. The organisation’s values and morals essentially came into

EU Strikes up Third Vaccine Deal With Pfizer

EU Strikes up Third Vaccine Deal With Pfizer

More COVID-19 vaccines are set to roll out this upcoming summer after the European Commission signed a third deal with German biotechnology company BioNTech and American pharmaceutical company Pfizer today.

EU Parliament Introduces Vaccine Certificates

EU Parliament Introduces Vaccine Certificates

With a vaccination certificate, travelling within the EU should become more uniform and easier. The EU Parliament has spoken out in favour of introducing it - negotiations with the EU