EU organizations can request loans up to 5% of turnover
The European Union organizations affected by the virus outbreak will have the option to request a government loan up to 5% of their turnover last year under a benchmark proposed by the European Commission, a reliable source stated on Sunday.
Different sources with direct understanding on the issue told Reuters on Saturday that some EU countries had requested such a measure.
The loan size could be up to 40% of the recipient’s yearly pay charge.
Such loans will be categorized under Subordinated Debts. Subordinated debts rank lower than senior debts in the event a company falls into liquidation or a bankrupt company has to pay its debt holders. As it is a high risk, subordinated debt carries higher interest rates. There will also be strict conditions applied to such loans.
As EU competition regulators await feedback from EU countries on the proposition, the turnover limit or the yearly compensation bill is still subject to change