The importance of the European Banking Authority in harmonising the credit moratorium regime

by Marina Barata (Master's in Law)

The pandemic outbreak caused by COVID-19 and the government measures taken by several European Union countries to address or mitigate the spread of the disease had, and continue to have, dramatic consequences for the economy.

Individuals and companies were affected by the economic crisis arising from the successive states of confinement, which created situations of default, even if in some cases temporary, of their financial obligations.

This possible and imminent lack of liquidity on the part of debtors would have a devastating impact on credit institutions, since loans defaults would lead to an increase in the number of defaulters and greater and heavier capital requirements for institutions.

For this reason, credit moratoria were implemented broadly by most of the European Union’s Member States.

Traditionally, a moratorium is the granting of an extension of a line of credit’s payment period, whereby the payment of the instalments is suspended for the period during which the moratorium lasts and the deadline for their full payment is extended for the same period. In the expression of the law, the moratorium is the deferment of the fulfilment of the beneficiaries’ obligation towards the banking system.

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Effective judicial protection of credit rights in the European Union

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 by Marco C. Gonçalves, Professor of Civil Procedure, University of Minho

The free movement of people, goods and services in the European Union – as a fundamental pillar for the construction of an internal market – led, inevitably, to an increase of the cross-border disputes, that is to say, disputes that are connected with two or more different Member States.

Consequently, this requires the European Union to adopt appropriate procedural instruments to allow the fast and effective resolution of these conflicts, within an area of freedom, security and justice.

In this regard, it is a fact that the European Union has been adopting a set of normative instruments of particular importance to guarantee access to justice in civil and commercial matters, mainly focused on judicial cooperation between the different Member States. In particular, stands out the definition of common rules on jurisdiction, recognition and enforcement of judgments in civil and commercial matters [1], service of judicial and extrajudicial acts [2], taking of evidence [3] and recovery of debts [4].

In any case, with regard to the judicial protection of credit rights in the European Union, the difficulties and problems that arise with regard to the effective satisfaction of creditors demand the urgent adoption of normative instruments that guarantee the protection and adequate satisfaction of these rights.
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