FINANCE

Support in the form of credit

support-in-the-form-of-credit

The Finance Ministry’s plan for the support of enterprises as of April provides for the coverage of their fixed expenditure in the form of credit toward their tax and social security obligations. This would be a decision in light of the containment and targeting of public spending that the pressing fiscal situation of the country dictates.

“In the next stage we will be using an instrument in the form of a voucher, or credit that the enterprises will have regarding their tax and social security obligations, and we can then offset that with additional revenues if things go well,” Alternate Finance Minister Thodoros Skylakakis told Skai Radio on Tuesday, referring to the cost of the lockdown and the exhaustion of resources provided by the budget for the support of enterprises.

The total budget of the measure covering fixed corporate spending comes to 500 million euros. This is obviously beyond budget planning, as the general support measures are increasing with the prolonged lockdowns. Skylakakis said yesterday that the additional cost from the shutdown of retail commerce in Attica comes to €200 million. Therefore the cost of this month’s first couple of weeks, when stores will apparently remain closed, amounts to almost the entire budget for the corporate support instrument planned.

The measure will only concern companies that employ staff and it will cover those with a turnover decline of at least 30% last year on an annual basis, as well as a certain amount of losses incurred; that amount has not yet been set, but it will likely be a portion of each company’s revenues. It is also unclear whether the measure will target any particular sectors.

Skylakakis said March will see cheap state loans, furloughs and rent reductions, meaning that the existing support measures will cover this month too. Next month will not only see the fixed expenditure coverage program, but also the regulation of the first three phases of the loans program, known as “Deposit To Be Returned,” rendering part of that support non-returnable.