Economic support beyond April to be targeted

The government is reportedly working on a support plan for the economy beyond April, when it is thought that the country will have returned to relative normalcy after the multiple crises triggered by the coronavirus pandemic.

Kathimerini understands that the aim at Maximos Mansion is for this support to be substantial and targeted, rather than horizontal, so that troubled companies heading for closure anyway and those that were not greatly affected by the pandemic do not benefit at the expense of the state treasury.

Given this targeted approach, it is obvious that tools like the 120-installment repayment plan for debts to the state or the non-refundable deposit are losing ground.

According to close associates of Prime Minister Kyriakos Mitsotakis, most of the vulnerable groups of the population, people at high risk and the elderly, will have been vaccinated in the next three months. This development is expected to allow the reopening of all sectors of the economy, with clearly fewer restrictions. 

Sources say that until then, the government will continue to support affected workers and companies with its existing tools, such as subsidies for the suspension of work, the repayable advance and rent reductions.

However, a new type of support will be required after this period.

It is obvious that many businesses will have accumulated serious liabilities, while restart funds will be required. But this support will be provided only where it is certain that it will have a positive impact, so that state funds are not squandered on lost causes. Aid will also depend on the industry and the type of business.

Cases will be examined by the Finance Ministry to decide the approval of support and to what extent. It will look at the profits or losses recorded by a business in the previous three years. More specifically, it will investigate whether a business has negative equity, the amount of its borrowing and the rate of turnover that it lost, but also the range of support it received over the last year.

As for the tools to support those given a positive evaluation, these are expected to be, among others, lending on particularly favorable terms or tax exemptions.

According to the same sources, special emphasis will given to the tourism industry, which generates roughly a quarter of the country’s gross domestic product.