The government is tackling the economic impact of the coronavirus pandemic with a seven-pronged plan aimed at helping businesses that is “cohesive, realistic, comprehensive and dynamic,” Finance Minister Christos Staikouras told a parliamentary committee on Friday. He also revealed that the interest rate for the payment of temporarily suspended tax and social security dues will be around 2.5%.
The minister explained that the first measure introduced to help companies in this period is a five-year state loan, dubbed “Deposit To Be Returned” and amounting to 2 billion euros in total. In its first stage, 52,494 companies received an average of some €11,500 each; the second stage is still under way.
The second instrument the government has introduced concerns the suspension of tax and social security obligations for households and enterprises for the entire period of the health crisis, and their settlement in 12 interest-free tranches or 24 installments bearing an interest of about 2.5%. This is less than half of the interest for the normal payment of dues in 24 tranches. Repayment will only begin in 2021, Staikouras added.
The third tool used in support of enterprises is the subsidizing of the interest of all business loans for companies in sectors damaged by the pandemic’s restrictions.
The working capital offered through Entrepreneurship Fund II constitutes the fourth measure, Staikouras said. He added that the Hellenic Development Bank has announced the approval and forwarding to all cooperating banks of 10.150 applications amounting to a total of €1.29 billion, for loan contracts to be signed with the companies and the cash to be disbursed.
The Guarantee Fund of the Hellenic Development Bank is the fifth instrument boosting the market, said the minister. It started operating on June 3, offering new loans to the market that thanks to leveraging can add up to €7 billion. The guarantee the Bank offers comes up to 80% for each working capital loan.
The last two measures of the government’s economic support plan for the market will be the planned reduction of the corporate income tax, which Staikouras said will be “generous,” and a new institutional framework for microloans that is being discussed in Parliament.