Tapping the state’s cash reserves
The government is preparing new measures to support enterprises and households, as the pandemic’s data are deteriorating by the day. The prospect of Attica entering a state of extreme risk (level 4), with increased restrictions, is growing, and combined with the new measures Prime Minister Kyriakos Mitsotakis is set to announce on Friday, it is clear the recession will prove deeper than forecast.
According to various scenarios being examined by the Finance Ministry, this year’s economic contraction could reach 10%, with the government set to tap its cash reserves to boost the market and workers with extra liquidity.
Among the plans on the table are the suspension of tax obligation payments, furloughs and the monthly handouts of 534 euros, while state loans to enterprises and freelance professionals continue. Applications for the third phase of the Deposit To Be Returned can now be submitted up until November 2, followed by the fourth phase and then in January the fifth. The fourth and fifth phases will be the most favorable, as the state loans will partly constitute grants to recipients.
According to a joint statement by the minsters of finance, Christos Staikouras, and development, Adonis Georgiadis, the state has channeled €7.9 billion toward the market in the last six months. This is set to rise to €11 billion by the end of the year, not including the special-purpose compensation for small enterprises that so far has run up to €500 million.
The payment of September’s value-added tax, paid in October, has already been suspended for six months, until April 2021, for regions at Level 4. This concerns companies that submit their VAT statement on time, and effectively constitutes an injection of liquidity into the market.
According to the decision signed by Deputy Finance Minister Apostolos Vesyropoulos, the VAT payment suspension concerns debts due from October 1 until Friday, payable by companies based in areas that have been at Level 4 for a minimum of 14 days.
