ECONOMY

Support now comes to €5.9 bln

support-now-comes-to-e5-9-bln

Finance Minister Christos Staikouras on Monday announced specific measures for the “greater, more immediate and targeted support of households and enterprises” to deal with the growing impact of the pandemic on the economy, raising the fiscal cost over the first quarter of the year to 5.9 billion euros, above the budget estimate that had earmarked €7.5 billion for that purpose for the entire year.

The most important new measure is the splitting of the sixth phase of the cheap state loans program, known as “Deposit To Be Returned,” so that it immediately starts  covering the January losses with €500 million. Therefore the sixth and seventh phase will add up to €1.5 billion, against an original provision for €700 million – €1 billion.

The submission of applications for the sixth phase will begin next Monday and the disbursement is scheduled for early March. As this only concerns the losses of one month (January), the minimum support to the sectors that are still closed on government order will be €500 and the maximum €50,000.

The minister added that the seventh phase, amounting to about €1 billion, will concern the losses of the entire first quarter of 2021, so the cash distributed takes into account the sixth phase too. It will be disbursed in late April.

Staikouras also offered details concerning the prime minister’s announcements last Friday regarding the extension of rental relief and the reduced value-added tax. Companies forced to remain shut will not have to pay any rent and their employees will continue to enjoy a 40% reduction. The cost of the 80% refund to those companies’ landlords will come to €70 million in March. This month will also see the completion of the offsetting of pending refunds for the months up to November 2020, given that some 25,000 applications by landlords did not include a valid IBAN bank account number. The December refunds will be paid in mid-February.

The extension of the reduced VAT on coffee, non-alcoholic beverages, transport, cinemas has been stretched to end-September, and on the tourism package to end-2021.