ECONOMY

Loan repayment to be put off

Gov’t ponders postponement of tranches for Deposit To Be Returned by three to six months

loan-repayment-to-be-put-off

The government is working on a plan to reschedule the repayment of the cheap state loans issued during the lockdowns, known as Deposit To Be Returned, so as to ease pressure on mainly small and medium-sized enterprises that are unable to meet their obligations not only as a result of the ongoing health crisis but also because of the energy rate hikes.

The Finance Ministry is seeking solutions to support the market with measures that will have a minor impact on the budget, such as those announced late last month regarding the return of the special consumption tax on oil for some 220,000 farmers in 2022, totaling 50 million euros.

The delay to the repayment of the state loans will practically inflict no harm to state coffers. The amount the government expects to collect comes to around €3 billion, a large share of which is projected to be returned by the end of the year, mainly from large enterprises in the tourism sector.

In that sense the government is considering shifting the payment of the first installment by three to six months. Those able to pay up can start, within this month, paying their tranches or even the entire sum in one go.

For enterprises facing problems, the idea is to have them start repaying their state loans either by the end of March or by the end of June. The payment plan might be similar to that being employed for debts in income tax and the Single Property Tax (ENFIA). Therefore, if the repayment of the state loans is postponed by three months, the first three tranches will all be due by the end of March.

Several alternative scenarios are currently on the table and decisions will be made depending on developments both in terms of the pandemic and with regards to the energy market rates.

According to the legislation in place, enterprises will have to pay off the cash they received across the seven phases of the Deposit To Be Returned program either in a lump sum with an extra discount of 15%, or in 60 monthly installments, with the first one due by end-January.