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The COVID-19 crisis will lead to a sharp contraction of GDP in all EU member states. From billions for airlines to several hundred euros for small businesses, governments have been supporting their economy in different ways.
The coronavirus will lead to GDP in all EU Member States contracting by an average of 8.3 per cent this year. But according to some forecasts, just a year after the recession, there will already be little traces left. We have reviewed the aid programmes in various countries. It is the biggest fish that have gained the most – airlines and international corporations.
A few days ago, the European Commission agreed to support two coronavirus-related research projects. Apeptico will receive a grant of €840,000 and Panoptes will receive €1.2 million. The money is to be spent on research into two drugs for coronavirus patients.
The Austrian programme to help businesses is worth €8 billion, which will go on: compensation of 75 per cent of fixed costs for three months. For small and medium-sized enterprises, the Austrian government has prepared guarantees for working capital loans, 100 per cent guarantees for loans of up to €500,000, though note that enterprises from the agriculture and fisheries sector are limited to loans of €100-120,000. For those that need a higher loan – up to €25 million – the guarantee will cover 90 per cent.
At the end of June, the European Commission approved a €21 million programme to support the production of medical products, equipment, technologies and raw materials related to COVID-19 in the Flemish region. In May, the Belgian government provided €25 million to support coronavirus-related research and development in the Walloon region. In April, companies from the Brussels region received €4 million for the same purpose.
Other industries have received a total of €780 million in loans. Belgium allocated €903 million towards trade credit insurance to protect companies against the risk of non-payment by clients. Exporters received €500 million in the form of guarantees.
The Bulgarian programme to support medium-sized companies is worth €102 million. It will take the form of direct grants of up to €75,000 per company, and will be accessible to companies active in all sectors except primary production and the processing of agricultural products, fisheries, aquaculture, forestry, and the financial and gambling sectors. A €88 million programme for direct grants to micro and small businesses was launched in May. The SME sector can also count on guarantees from the Bulgarian Development Bank amounting to €255 million. All companies can also apply for wage subsidies, the government has allocated €770 million for this purpose and companies can receive subsidies of up to 60 per cent of wage costs.
The Cypriot government has allocated €106,000 in direct grants to newspaper publishers. Airlines received €6.3 million. The subsidy for one company cannot exceed €800,000 and depends on the given airline’s load rate, and may be used by carriers operating flights to and from the island.
The micro-businesses sector received €100 million in direct subsidies, with up to €6,000 available per company. There is another €180 million also for larger companies, to reduce the interest rate on loans taken out after 1 March 2020. Cypriot farmers will receive €1.8 million as a direct subsidy.
Companies can also take advantage of deferred VAT payments, under a programme with an allocated budget of €33 million. VAT payments due on 10 April, 10 May and 10 June can be deferred, with companies able to pay the tax by 10 November at no additional cost.
There is a programme of €2.6 million in direct subsidies for companies in the Moravia region. The whole programme put in place by the Czech government for the sector of small and medium-sized enterprises in the agricultural sector is worth €36 million; companies can apply for their bank loans to be written off, with direct subsidies of up to €100,000 for a company. The trade and services sector received support of €184 million, where companies can count on rent subsidies of up to 50 per cent for three months (as long as that the tenant reduces the rate by 30 per cent).
Government guarantees of loans for companies with up to 500 employees is another €18.5 billion in aid. For large companies whose exports generate at least 20 per cent of their revenues, €5.2 billion was allocated towards loan guarantees. In addition, the government will provide €37 million to support SME investments in pandemic-related production, and €7 million for R&D.
In June, €80 million was earmarked to support businesses in the maritime, transport, travel and infrastructure sectors, as a guarantee for loans of up to 90 per cent of their value.
For the cultural sector, €800,000 was allocated, also in the form of loan guarantees, up to 100 per cent of their value. Micro-enterprises will receive €322 million in subsidised loans and loan guarantees. The Croatian government will allocate €4 million to support fisheries, with companies able to apply for direct subsidies. The state is also offering zero-interest loans to companies in various industries.
On 2 June, a €97 million programme in support of companies in the tourism industry was approved. This is to compensate for losses suffered up to 100 per cent between 26 January and 31 May 2020. Media companies will receive €32 million to compensate for up to 80 per cent of advertising losses incurred from 9 March to 8 July 2020. The loss will be calculated based on a comparison with 2019 figures. The organisers of concerts and public events with more than 350 participants are to be compensated for their losses this year, for which the Danish government has allocated €310 million.
Start-ups in connection with the coronavirus have been allocated €296 million; companies can apply for favourable loans.
An additional €130 million has been earmarked towards deferrals of VAT and payroll tax liabilities. Companies that can demonstrate that a 40 per cent drop in revenues from March to June due to the pandemic will be entitled to compensation; in particular they will be compensated for fixed costs that they continue to bear. In March, a €1.3 billion programme was launched, thanks to which the self-employed could receive subsidies.
The government has allocated €4 million in direct subsidies towards covering the rent of companies leasing premises in shopping centres. It is possible to receive up to 25 per cent of the monthly rent for the period 27 March-11 May.
The government will also allocate €1.75 billion in public guarantees and subsidies for loans. In addition, €75.5 million will be earmarked to support companies affected by the COVID-19 outbreak and will take the form of direct grants.
Aid to Finnair will take the form of a capital increase of €500 million, of which the state will take up new shares worth €286 million.
A Finnish scheme worth €120 million will be used to compensate companies operating restaurants, bars or cafés for the loss of revenue due to the outbreak of the coronavirus, up to 15 per cent of the revenue lost for the two months of the blockade in Finland. The maximum amount of aid that can be paid out is €500,000.
A further €600 million is intended to support maritime enterprises; it comes in the form of state guarantees for working capital loans. There is also €40 million in direct subsidies to companies in the agriculture and fisheries sectors. This grant is intended to cover wages and rent.
The government is allocating €30 billion to support companies by offering low-interest loans. The subsidised loans will be available to various sectors other than the financial sector. A further €207 million is available to support the tourism industry by covering part of the wage bill. There is also €5 billion in support for research and development, testing and upscaling infrastructure, and the production of coronavirus-relevant products.
A €7 billion loan was also paid out to Air France, in order to provide the company with liquidity, along with a €5 billion to Renault. For companies with an annual turnover of less than €1 million and up to 10 employees, there are subsidies for operating costs where revenues are shown to have fallen by 50 per cent compared to 2019.
A €500 billion fund has been created, to be used for guarantees and subsidised loans. The European Commission has already agreed to a €6 billion contribution to the recapitalisation of Lufthansa and €550 million to the charter airline Condor.
A €500 million programme has been put in place to support the self-employed, which means a one-off payment of €800 per person.
An additional €10 million has been allocated for direct grants to companies in the floricultural sector, and a further €2 billion in guarantees for eligible loans to companies affected by the pandemic.
A €23.5 million scheme is in place to support the aviation sector. The public aid will take the form of exemptions from the employer’s contributions to social security for employees (23 per cent of gross salary).
There is also a scheme worth approximately €145 million to compensate large companies for damage suffered due to the outbreak of coronavirus. Companies will be entitled to compensation in the form of direct subsidies, covering up to 100 per cent of the difference between operating results and a reference period before the virus outbreak. It is estimated that around 50-100 companies will benefit from the support.
Approximately €155 million has been allocated to support companies in the form of direct grants covering company investments aimed at preserving jobs or creating new ones.
There is a €250 million scheme supporting micro and small enterprises affected by the COVID-19 outbreak. The aid takes the form of direct grants equivalent to the local commercial property tax for 2019, subject to a maximum amount of €10,000 per company.
There is a €200 million programme supporting investment in research and development, testing and production of products that are relevant to the coronavirus outbreak. The government is also offering support in the form of repayable advances to companies that have experienced a turnover drop of at least 15 per cent, and have an annual turnover of less than €500 million.
In July, the European Commission approved a €1.2 billion programme to support businesses in the agriculture, forestry, fisheries, aquaculture and other related sectors affected by the coronavirus epidemic. Support will take the form of direct grants, repayable advances, tax and payment advantages, the reduction or cancellation of social security contributions, debt relief and other payment facilities. The Italian government estimates that over 1000 enterprises will benefit from the measure.
In addition, €6.2 billion has been earmarked for direct grants to small businesses and the self-employed affected by the COVID-19 outbreak. The amount of the available grant is the difference between the turnover in April 2020 and 2019, at least €1,000 for a self-employed individual and €2,000 for a company. The measure is intended to support 2.6 million small businesses and the self-employed.
There is also a €7.6 billion programme to finance subsidies for a regional tax on production activities, a municipal tax exemption, tax credits to support the adaptation of production processes and jobs to new sanitary requirements, as well as tax credits for certain companies and the self-employed.
A scheme has been approved worth €25 billion to compensate the self-employed and companies with up to 500 employees. €12 million has been earmarked for direct subsidies to farmers.
€9 billion is available to support the Italian economy. Italian regions and autonomous provinces, other territorial authorities and chambers of commerce will be able to support companies of all sizes, including the self-employed, SMEs and large companies. The support will include direct grants, loan guarantees and subsidised interest rates.
There is €70 million to support companies in the agricultural and fisheries sectors in the Campania region, and €50 million to support the agricultural, forestry and fisheries sectors in the Veneto region.
Under the Temporary Framework, an aid scheme worth €58 million has been established to provide rent subsidies for companies. In addition, tenants are exempt from interest on arrears and cannot incur contractual penalties. There is €160 million in loan guarantees for medium-sized and large enterprises for which exports account for over 30 per cent of their annual turnover.
€250 million has been allocated to the recapitalisation of the airBaltic airline, and the state's shareholding will increase to over 96 per cent. In addition, €800,000 will be available in the form of direct grants to support tour operators.
There is a €35.5 million programme in place to support the agricultural, fisheries, food and school catering sectors, which are struggling with the coronavirus outbreak, including €1.5 million as zero rate loans.
€47.5 million has been earmarked to support enterprises involved in the production and processing of animal products, including €7.5 million as direct subsidies and €40 million as loan subsidies. In addition, the Lithuanian government allocated €12 million in direct grants to cattle farmers and €18.5 million to milk producers, subject to a maximum of €100,000 per beneficiary.
There is €50 million to support travel agencies, tour operators, accommodation and catering businesses, in the form of: guarantees and loans, with a maximum of €800,000 per beneficiary.
€59 million to support enterprises active in the agricultural, food, forestry, rural development and fisheries sectors, including €9 million in direct grants and €50 million in loan guarantees. The programme is expected to benefit around 1,300 companies of all sizes operating in these sectors.
€10 million has been allocated to direct grants supporting cultural and artistic institutions and organisations. SMEs can apply for loans and credits with funding, the government has earmarked €100 million for this programme; loan can be granted for up to 72 months and for sums of up to €1 million.
There is €145 million available as guarantees for companies with trade credit. Under a scheme for audio-visual production companies, €7 million is available in the form of direct subsidies of up to €10,000 per beneficiary, as well as loans of up to €250,000. In addition, €260 million is to support companies seriously affected by the coronavirus epidemic, offered in the form of direct grants.
There is a scheme under which companies will receive up to €7,500 per company to cover their rent, and up to €7500 per company to cover their electricity bills. In addition, the government will allocate €40 million towards subsidising the interest rates on loans to companies.
€77 million in direct grants has been made available to general care providers such as district nurses, psychiatric care and social services. There is a €3.4 billion aid measure consisting of a state guarantee on loans to KLM. There is also a €1.4 billion scheme to support small and medium-sized enterprises in the form of direct grants, with up to €50,000 per company.
€160 million has been allocated to transport companies, to compensate for the decline in turnover.
€650 million will be used to help farmers and traders in the floriculture and potato sectors, as well as companies in the specialty horticulture sector for the food-service market. €10 billion has been earmarked as loan guarantees for companies.
There is €449 million to support R&D and the production of coronavirus-relevant products. It will take the form of direct grants and loans to companies. There is €9 million to support agricultural enterprises, as interest rate subsidies on loans.
The financial shield for companies involves a €5.5 billion programme in the form of subsidised loans at favourable interest rates, which can be redeemed by 30 September 2021 in an amount not exceeding 75 per cent of the actual damage suffered by the beneficiary companies. The scheme is expected to benefit around 350,000 micro-enterprises and 26,000 SMEs that report a decrease in revenue of at least 25 per cent in any month after 1 February 2020.
€40 million is available to support businesses affected by the COVID-19 pandemic in the autonomous region of Madeira and €43 million for the Azores.
A rescue loan of €1.2 billion has been allocated to TAP airlines and €20 million to help companies in the fisheries sector. There is also €140 million for research and development linked to the fight against the pandemic.
There is an €800 million scheme in place to support companies in the form of subsidised loans and state guarantees for loans.
€80 million has been earmarked to support research and development. There is also a business aid programme worth €4 billion, including €200 million in rent subsidies – up to a maximum of 50 per cent of rent, as long as the owner has agreed to reduce the rate by 20 per cent. Employers can also be reimbursed for part of payroll costs, including the employer's social security contributions for employees. The government expects the measure to support nearly 400,000 employees and 300,000 self-employed people in their jobs.
Support to businesses is in place under a €222 million scheme in the form of subsidised loans. There is also a scheme worth €200 million, available to large companies as compensation for losses incurred between 31 March and 31 May. The compensation will cover up to 100 per cent of the difference between a company's operating results during the compensation period and its operating results during the reference period before the outbreak of coronavirus.
There is also a €600 million programme of direct subsidies and wage subsidies.
The two tranches of the aid schemes are worth €40 billion and consist of both state guarantees for companies and direct grants. Immediately after the closure of borders, restaurants and shops, the government authorised the extension of tax payments until 20 May, and customs duties until 30 May. For the duration of the lockdown, companies were exempted from making compulsory contributions from wages, up to as much as 100 per cent.
€9.5 million for companies that operated cancelled ferry connections, as part of direct subsidies for being out of traffic. There is also a €3.7 billion scheme to compensate other companies for a drop in turnover – companies that recorded a drop in turnover of at least 30 per cent in March and April are eligible. The compensation can be up to 75 per cent of the company's fixed costs, with a maximum aid amount of €14 million. The airline SAS received a €137 million revolving credit, and there is €450 million available for the hotel and commercial restaurant industry, covering up to 50 per cent of the rent.
Translation by:Nick Faulkner | VoxEurop