Greece presents fresh economic measures to tackle COVID-19 emergency

Greece presents fresh economic measures to tackle COVID-19 emergency

In a press conference on Wednesday, Greece’s Minister of Finance Christos Staikouras, Development Minister Adonis Georgiadis and Labor Minister Yannis Vroutsis presented a fresh round of measures, worth approximately 2 billion euros, to help the economy tackle the COVID-19 public health crisis.

The presentation provided further details on the emergency package announced by Prime Minister Kyriacos Mitsotakis earlier this week. Thirty one new coronavirus cases were confirmed in Greece on Wednesday, bringing the total number of people who have contracted the virus to 418. The total number of people whose lives the coronavirus has claimed remains five.

All three ministers stressed the need for businesses to protect jobs, pointing out that firms will be ineligible for support if they lay off employees in response to the coronavirus impact. So far, Christos Staikouras said, 200,000 businesses employing approximately 600,000 people have been ordered to close.

Most notably, a freeze on tax and social security contributions for affected businesses in specific sectors was announced. The measure applies for March and an extension may be provided if necessary.

A freeze on VAT payments, tax and debt dues for affected businesses will apply to 31 July, providing that affected firms don’t lay off employees during the health crisis. Moreover, business funding in the form of up-front payments worth 1 billion euros in total, will also be provided.

Employees affected by business closures will be compensated with 800 euros in April, providing that their contracts have been suspended. The measure concerns about 500,000 employees and is worth approximately 400 million euros. These employees will see their tax obligations for March suspended for 4 months. Employees affected by business closures will also see social security payments covered by State.

An additional 1.8 billion euros to support business liquidity and jobs via special EU Emergency Fund. The EU has also agreed to wave Greece’s primary surplus targets for 2020 and not take into account the fiscal impact of emergence measures to tackle COVID-19.

A VAT reduction from 24% to 6% for specific products (i.e. surgical masks, soap, antiseptics gels, etc.) was also announced.

Earlier, it was revealed banks plan to freeze business debt and loan repayments for up to 6 months, while the Capital Market Commission is also set to take measures to protect Athens Stock Exchange.

The Development Minister said bank loan interest rates for business are to be subsidized for 3 months, while a guarantees mechanism will be setup for loans to SMEs and special purpose loans will be granted to affected businesses.

Finally, the Labor Minister said businesses ordered to close by the State will be obligated to keep all their employee. Any layoffs will be considered void. Social security coverage will be available to employees for the duration of business closures./ibna