FINANCE

Liquidity boost on the menu

liquidity-boost-on-the-menu

The government is planning to hand out cash support to food service enterprises amounting to between 20% and 30% of their regular turnover so that they can restart their operations when the decision to end the sector’s lockdown is made.

This support will be in the form of non-returnable grants and will concern the sector’s companies that have suffered due to the pandemic and lost at least 30% of their annual turnover.

Many food service businesses across the country will have been shuttered for five consecutive months this Saturday and they are certain to remain closed until at least mid-April.

Sources say that the reference period for the determination of the amount to be paid out will likely be the turnover each company recorded in 2019, while for enterprises that started operating last year the yardstick will be one month of normal operations, although the sector found itself operating under significant restrictions after May 2020.

Deciding which year should be used as the period for comparison for the companies established before 2020 will not be easy, competent officials note, due to the high degree of tax evasion in the sector: That will lead to many enterprises showing lower revenues in 2019 than in 2020, and therefore being ruled out of the support package.

More conditions will also need to be fulfilled for food service businesses to collect the grants, such as the maintenance of the same number of employees for a specific period of time.

The program’s total budget will be 350 million euros, financed by European Union resources that had been distributed for programs and actions with a low absorption rate. This will practically mean a redistribution of funds allocated to domains with low demand, mainly because the pandemic has changed conditions and priorities for the enterprises themselves.

The difficult task of finding the resources and drafting the program is the responsibility of Deputy Development Minister Yiannis Tsakiris, but the definitive approval will rest with the Finance Ministry and the European authorities. The final announcements will be made soon by Prime Minister Kyriakos Mitsotakis.