ECONOMY

Post-pandemic support plans

post-pandemic-support-plans

The government is making plans for the instruments with which it will support the economy as the country emerges from the pandemic, even though the Finance Ministry’s main concern right now is how long the current lockdown will last, with enterprises and households requiring further assistance.

According to a government source, five ideas concerning the economy’s post-pandemic support are being mulled. The first is a repeat of the reduction or suspension of the tax deposit for the 2022 incomes that would be payable this year, as was the case in 2020. Sources say this measure has already been decided, and only the reduction criteria are left to be determined. Ministry officials say the measure’s benefit will not be as significant this year, as companies will declare very low profits anyway, so the deposit would be minimal or zero for most of them. The measure’s application in 2020 had injected liquidity of 1.5 billion euros into the market.

The second idea concerns training action subsidized to the tune of €200-300 million from the Next Generation EU fund; plans provide for a high share of digital training for workers to adjust to the new demands of the labor market. Another idea pertains to job creation incentives; this measure remains to be determined, but will be in addition to the incentives already offered with the coverage of social security subsidies for six months.

The fourth instrument under consideration is the activation of the fixed subsidy support to enterprises, but this will have to wait until the government has all the data allowing for the targeted support of enterprises.

Finally the ministry is planning loan haircuts for the first three phases of the cheap state loans program, known as the “Deposit To Be Returned,” as has been the case since the fourth phase; therefore up to 50% of the loans will be turned into grants.

The ministry is keen to apply targeted measures so as to benefit only those in real need, as the state cannot afford to support those who do not really require it.