The European Commission’s proposal for a directive covering the harmonising of certain aspects of insolvency law could not be finalised during the last legislative period. Firstly, the Council was not yet ready. Secondly, the rapporteur, Pascal Arimont, did not manage to present a draft report for discussion in the European Parliament. The reasons for this were only rumoured behind closed doors. It was rumoured that political pressure was exerted.

The Council has agreed on partial aspects

On 13 December last year, the Council created facts through a partial alignment and it also agreed upon a number of key aspects in the proposed legislation. It is now up to European Parliament to take a closer look at the dossier. The deliberations in the responsible legal committee (JURI) have not yet begun. However, a new rapporteur has been appointed: Emil Radev, from the European People's Party (EPP) in Bulgaria, is responsible for the dossier.

Social contributions have been earmarked

DSV is looking forward to the committee's deliberations. It proposed creating an exception for social insurance during the last legislative period. This is intended to exclude the social insurance institutions from the possibility of filing an action for annulment. The aim is to prevent social security contributions that have already been paid from being reclaimed by the insolvency administrators so that they can be added to the insolvency estate. The social insurance funds' argument is: These funds are earmarked and must be available for social welfare tasks. They are not there to settle the payment problems of commercial enterprises or claims from their business partners.

Insolvency proceedings would delete contribution funds

The current situation is easy to describe. Outstanding social security contribution claims lodged by the social security funds against insolvent companies must be paid from the insolvency estate. Contributions already paid prior to the opening of the insolvency proceedings that were contested during the so-called "suspicious period", must then be refunded retroactively and added to the insolvency estate. The coverage ratio for outstanding premium claims recently averaged just over six per cent in Germany. Whereas 100 per cent of the amounts paid by the insolvency administrators can be reclaimed, only a fraction of the claims lodged by the social insurance institutions are paid from the insolvency estate. Around 94 per cent of the funds are lost to the social security funds as they are used to service third-party claims.

Insured people are additionally burdened

There is a second side to the problem: Benefits are provided by the health insurance funds or the employers' liability insurance associations during the suspicion period. Pension insurance entitlements also arise. These benefits are not offset by contribution payments. They are "solidarised", which means that these benefits are financed by the solidarity communities, i.e. the insured. As right as it is to guarantee the social protection of the employees involved, it is not appropriate for the solidarity communities to have to shoulder the loss of contributions due to insolvency.

Solving the fairness problem

DSV hopes that the parliamentarians in the JURI will recognise this problem and give their negotiators a mandate at the end of their opinion-forming process to fight for more fairness in this area in the trialogue. The Council has already made it clear in its partial statement released on 13 December last year that it will not touch this hot potato.