Social security contributions need special protection.

The ninth legislative period is drawing to a close. The most recent legislative proposals are still waiting to be finalised. They include the European Commission's proposed directive to harmonise specific insolvency law issues. Whereas compromise texts are currently being discussed by the relevant working groups in the Council, the European Parliament - and not only there - is looking forward to the report from Pascal Arimont (BE, EPP), a member of the responsible legal affairs committee (JURI). This has been scheduled for the beginning of March. So it is on schedule. 

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The proposed directive also aims to standardise the conditions for obtaining the legal instrument needed for an annulment action. Assets should also be easier to trace, for example, by making it easier for insolvency administrators to access bank account information. A simplified liquidation procedure will be introduced for small enterprises. A new "pre-package procedure" will also enable insolvencies to be processed more quickly by selling the company in question to the best bidder with the aim of continuing the business.

Not misappropriating contribution funds

During the political consultations, German Social Insurance has pointed out that the social insurance institutions' contribution funds will need special protection in insolvency proceedings. These contributions must be available for the social security system's pension obligations, and they must never be merged into insolvency assets that will serve other purposes, such as the restructuring of insolvency debtors. Whether - in line with the European Court of Justice (judgement of 17 September 2020, file number C-212/19) - it should even be assumed that unlawful aid is involved here will also have to be studied, as exemption from social charges falls under the concept of aid (see DSV News 03/2023 as well).

These concerns were also taken up by the European Parliament's Committee on Economic and Monetary Affairs (ECON) in its opinion of 30 November 2023. However, JURI's opinion, being the committee responsible for the dossier, will be decisive with regard to the position that the European Parliament is scheduled to adopt at the end of April. We eagerly await the rapporteur's draft and the subsequent committee discussions.