Source: European Parliament
The implementation framework of budgetary guarantees, for instance under the European Fund for Strategic Investments (EFSI), requires that partner institutions implementing them (for EFSI, the European Investment Bank) manage and share concomitant risk exposures as part of their own.
Hence, the Commission is in close contact with the banks to ensure that the guarantees concerned are managed as such and in accordance with established terms and risk management frameworks, as well as market practice.
However, it is recognised that the principal expenditure for programmes deploying budgetary guarantees is meant to cover potential losses on some of the supported investments, which without such support would not be financed by the market at reasonable terms while they make an important contribution to EU policy priorities.
That is why budgetary guarantees are provisioned from the outset so that occasional losses do not impinge on the relevant programmes and their capacity to provide substantial leverage in supporting EU policy priorities.
For instance, the InvestEU Programme[1] is on track to mobilise more than EUR 370 billion of investments, comparing with ex ante provisioning of EUR 10.46 billion.
Moreover, the Commission notes, that in the specific case of interest to the Honourable Members, insolvency proceedings have not yet concluded.
- [1] https://investeu.europa.eu/index_en