ECONOMY

More and more state support

more-and-more-state-support

The Finance Ministry is planning additional support for corporations and freelance professionals totaling 1.5 billion euros, which may well be increased further should the pandemic restrictions be extended.

March will see the start of the sixth phase of the cheap state loans program (“Deposit To Be Returned”), followed by the new framework for business support with sums up to €10 million per enterprise (up from the original amount of €3 million per the European Union framework).

It is also highly likely that shuttered enterprises will not have to pay any rent at all in March either, as has been the case for January and February.

Although the government has not yet revealed the amount it is set to spend on market support measures, as the new conditions are hurting the budget due to the new funds required for the employment contract suspensions to continue into March, plans provides for the sixth phase of the loans program to run to €1 billion and the business support framework to reach €400-500 million.

The government also has the flexibility now to continue the programs for the support of enterprises up to the end of 2021, following a decision on state subsidies by the European Commission. It will further be able to partially transform the cheap state loans into subsidies, which the beneficiaries will not have to return, as has been the case with the fourth and fifth phases of the loans program.

Besides the state loans and the business support framework planned, the ministry intends to offer full exemption from rental payments for the companies closed by government order until January 15 not only for March, but also for the months to follow if that is required. The state will continue to compensate landlords to the tune of 80% of the rent in cash.

The ministry is further considering reducing the corporate income tax deposit for companies and freelance professionals by up to 100%, regarding any profits they have managed to obtain amid the raging pandemic.