Greece’s Response to COVID-19

03 April 2020 | GREECE

4th Set of measures

1. Special financial support of 800 euros is expanded to many more employees. In total, 1.7 million employees can receive it, covering 81% of all private sector employees. This allowance, for those employees who are temporarily suspended from work, is tax-free, unseizable and non-offset. In parallel, their insurance contributions will be covered, on their nominal salary, for 45 days. These employees will be, inter alia, granted with suspension of payment of certified tax debts for 4 months, with the possibility of a 25% deduction if they are paid on time. All employees are covered, either on a full or part-time basis, with full or part-time or rotating employment.

2. Measures to protect and preserve jobs are being extended to many more companies. In total, around 800,000 companies, representing 76% of all legal entities, are covered through different schemes. Businesses sectors that are now excluded are very few, since 86% of Activity Code Numbers (ACNs) are covered by favorable State provisions. For most of them, i.e. 99% of those we cover, inter alia, payment of VAT and installments of tax debts owed shall be suspended. For installments of outstanding certified debts to the Tax Authorities of April, a 25% discount is provided should they be paid on time. In addition, should April payable VAT liabilities be paid on time, 25% of their amount is offset with future tax debts. It is stressed that for businesses that had not been included in any regulatory framework until present date, the condition for being eligible for any April favorable State provisions is to maintain their existing jobs as of the time of the current announcements.

3. In addition, different schemes cover 700,000 freelancers, self-employed and small business owners, regardless of their legal form, accounting for 75% in total.

4. The financial scheme of the “repayable deposit” is set up to further support small and medium-sized enterprises, active throughout all economy areas which are affected by the health crisis. The total amount of the financing scheme is 1€ billion. Its operation consists of direct financial support to businesses, which is wholly or partly repayable to the State, depending on the course of business. The financial aid is granted to businesses directly by the State under the Tax Administration Electronic System (TAXISnet). The level of aid to each business will be determined - on a standardised basis - by the change in the current situation of the business, taking into account its additional characteristics. Businesses interested in utilizing the scheme of the Ministry of Finance should register in the Independent Public Revenue Authority online platform (myBusinessSupport) 2 to 10 April 2020. The financial scheme of the deposit repayment is mainly aimed at supporting businesses so that they can maintain their jobs. Therefore, the businesses that will take advantage of the scheme fall under the non-dismissal clause, which has been in force since the time of the current announcements.

5. The Easter bonus shall be paid in its entirety by all businesses to all employees. Businesses that are not covered by the State provisions must pay the Easter bonus within the deadlines stipulated by law. In the event of employees being temporarily suspended, the Easter bonus corresponding to the period of the termination of the employment relationship shall be paid by the State budget. In addition, 108,000 employees in hospitals and health centers in the country, medical, nursing and other staff, the National Emergency Aid Centre, the National Organisation of Public Health and the employees of the General Secretariat for Civil Protection shall receive an extra support, estimated to take place until April 10th.

6. Banks and loan administrators, in close cooperation with the relevant Ministers of Finance and Development and Investment, will facilitate the payment of installments of loans to households and businesses affected by the crisis, as these categories of citizens are presented today.

7. Support measures will be developed for primary sector affected by the COVID-19. To this end, an amount of 150€ million has been made available directly from the Ministry of Finance to the Ministry of Agricultural Development and Food to finance and implement these measures. Additionally, Community resources related to the Ministry of Agricultural Development and Food will also be utilized with the utmost flexibility to finance further support measures and to be added to the original grant by the Ministry of Finance.

8. An Additional State Budget is provisioned, with an increase in the creditings of the special account of the Ministry of Finance created to implement public health protection measures by the COVID-19. The creditings are increasing by 5€ billion eventually. This is required because:

i. Suspension of tax liabilities exceeds 2.1€ billion.

ii. The suspension of insurance liabilities and the coverage of insurance contributions by employees and self-employed persons amounts to 1.6€ billion.

iii. The extraordinary financial support amounts to 1.4€ billion.

iv. The total financial burden of these measures amounts to 5.1€ billion, for the months of March and April alone.

This financial burden, along with additional public health spending, the "refundable deposit" to boost businesses liquidity, the support of the primary sector, the support of the Budget to cover the Easter benefit of temporary employees under suspension status and the extraordinary support to public health staff, amount now to 6.8€ billion, which is around 3.5% of the national GDP. A percentage much higher than the European average, which, according to the European Commission, was 2% of GDP last week. These aforementioned amounts do not include the support of the productive fabric of the economy, through the NSRF and other European funds.

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