Greece's Set of Measures for Covid-19

24 March 2020 | GREECE

1st set of Measures

  • An additional 200€ million has been allocated to the existing budget of the national health system. Any extra funding that the Ministry of Health might need in the effort to stem the spread of COVID-19 will be provided.
  • Suspension of tax and social security contributions for businesses closed by an administrative decision of the State.

2nd set of Measures (following the Eurogroup)

Suspension of tax and social security contributions for businesses

Businesses affected by the pandemic will be identified by their activity code numbers. The measures apply to all businesses in a given sector, regardless of size and regardless of whether temporary closure is voluntary or ordered by the state.

For all relevant businesses, the following payments are suspended (interest and surcharge-free) for 4 months:

  • Payment of VAT, payable in March.
  • Payment of any type of certified debt to Tax Offices or the Audit Centers.
  • Payment of regulated installments of partial payment of certified debts.

 

Business financing.

A €1 billion financing framework will be implemented, in the form of a revertible advance payment, with an extended repayment and grace period, for all businesses severely affected by the spread of COVID-19.
The grant framework will be specified in the next few days and the main goal is the preservation of existing working positions.

 

Income Subsidy

All employees, whose employment contract is temporarily disrupted due to the suspension of the operation of the business they work in after government order, will receive compensation of 800€ from the state budget in the beginning of April.
This measure applies to around 500,000 employees incurring a cost of about 400€ million. In parallel, the payment of March tax liabilities is suspended for 4 months for these employees.

For self-employed and individual businesses operating in sectors with a sharp decline in economic activity due to the arrival and spread of COVID-19, all tax liabilities, payable in March, are deferred for 4 months.
The total cost of this intervention, for 1.4 million employees, freelancers, self-employed and traders, now exceeds 2€ billion in April. Today, ACNs of the affected sectors will be publicly released. The list is dynamic and will be constantly adapted in accordance with Ministerial Decisions as the crisis unfolds. It is estimated that around 440,000 private companies, with 1 million employees, and a monthly turnover of about 6.5€ billion are included.

 

An additional 1.8€ billion will be allocated through the European Special Investment Fund / Coronavirus Response Investment Initiative

This fund was created last week to counter the effects of the spread of COVID-19. The funding will be immediately available and may finance business liquidity, employment support and employee income.
Business liquidity will further be supported by optimally combining funds from the Public Investments Program, the NSRF, the Greek Development Bank and the European Investment Bank Group.

 

Reduction of VAT to 6% from 24% in products necessary to protect against COVID-19 and prevent its transmission

This reduced VAT rate will remain effective until the end of the year.

 

Intervention in the real estate market

Businesses that are obliged to terminate their business activity due to the spread of COVID-19 will, by law, pay only 60% of any rent of their commercial property, for the months of March and April.
The same applies to primary residence rents of employees of businesses compelled to cease their activity because of the spread of COVID-19 and whose employment contract is suspended.
Landlords will have payments of their tax liabilities suspended for 4 months.

 

Suspension of new property values for one year

The 2020 ENFIA (real estate tax) will be based on existing property values, and the new property values will apply next year onwards.

 

The Independent Authority for Public Revenue will proceed with immediate repayment of all outstanding liabilities to citizens and businesses, refunding all cases under review of up to 30,000€

 

Banking measures

  • Banks and loan administrators, in close cooperation with the relevant Ministers of Finance and Development and Investments, will support both businesses and individuals affected by the crisis, facilitating installment payment of their loans. Employees, freelancers and individual businesses will be able to suspend installments for up to 3 months.
  • Following the ECB's decisions, the amount that banks can distribute to SMEs via working capital loans is being doubled, and thus it could be as high as 6$ billion. The measure is valid for a month. For the period that the business makes use of this measure, it is prohibited to fire staff.
  • Banks are already suspending the bankruptcy payments for consistent businesses until September. 
  • Bank branches shall remain open; however the Hellenic Bank Association will issue an announcement that will be limiting direct transactions to safeguard the health of bank employees and customers.
  • Finally, the Hellenic Capital Market Commission already undertook precautionary measures to protect the stock exchanges.

The total sum for the measures, both from the state budget and European sources, now amounts to 10€ billion. Subsequently, submission of a new budget is required.

A supplementary budget will be submitted, with the Ministry of Finance's regular reserve increased by 4€ billion.

3rd set of measures 

More specifically: 

  1. Banks and loan administrators, in close cooperation with the relevant Ministers of Finance and Development and Investments, have decided to support both businesses and individuals affected by the crisis, facilitating an installment plan of their loans. Employees, freelancers and individual businesses that receive the financial aid of 800€ will be able to suspend their installment plan for a period of three months. In this way, along with the previous sets of measures, all debts to tax offices, insurance funds and banksof households and businesses are now suspended. 
  1. Having ensured the necessary financial and budgetary flexibility, the goevremnet directly supports 1,400,000 private sector employees, freelancers, self-employed and traders, by extending the financial aid of 800€. This aid will be unseizable. More particularly, affected business employees and employees suspended from their employment contracts will be entitled to the exceptional financial aid. The same will apply to all affected freelancers, self-employed and traders. For all the country 's workforce, who will be the beneficiaries of the exceptional financial aid, measures are being taken to cover all insurance costs while keeping the insurance rights of all beneficiaries unaffected. The total cost of this intervention, for 1.4 million employees, freelancers, self-employed and traders, now exceeds 2€ billion in April. Today, ACNs of the affected sectors will be publicly released. The list is dynamic and will be constantly adapted in accordance with Ministerial Decisions as the crisis unfolds. It is estimated that around 440,000 private companies, with 1 million employees, and a monthly turnover of about 6.5€ billion are included. 
  1. Employees who were fired or forced to resign from March 1st to 17th will also receive the 800€ financial aid.
  1. The Easter bonus will be paid in full to all businesses and employees. Given the extraordinary circumstances, the Easter bonus can be paid at a later date by employers, without penalties, in order to relieve businesses of the adverse effects of COVID-19 on their liquidity, and most importantly, to achieve fairness in the payment of the Easter bonus across the whole of the economy and not just to some businesses and sectors that are not currently in a restrictive mode of operation. Additionally, 108,000 hospital staff, medical, nursing and other staff, National Emergency Aid Centre staff, Hellenic National Public Health Organization staff, and the General Secretariat for Civil Protection staff will receive the Easter bonus. This bonus has been removed from the public sector.

A supplementary budget will be submitted, with the Ministry of Finance's regular reserve increase by 4€ billion. Banks and loan administrators have decided to cover not only businesses but also individuals with more flexible installments payments of loans. Employees, freelancers and individual businesses will be able to suspend installments for up to 3 months. Affected employees with their employment contracts in suspension status will be eligible for the exceptional financial aid. This applies to all freelancers, selfemployed and traders. Moreover, those who were fired or forced to resign between March 1-17 will also receive 800€ and the exceptional financial aid will be unseizable. Development and Investments Minister Adonis Georgiades assured that "those who want that, they can seek more personalized and favorable solutions than in the past. No one will be left behind, and there will be no more repeated requests and nuisance from collecting companies". 

As far as after the crisis business loans, following the ECB's decisions, the amount that banks can distribute to SMEs via working capital loans is being doubled, and thus it could be as high as 6$ billion, the minister stated. 'Those businesses or employers who are severely affected will be able to place part or all of their staff in suspension status. The measure is valid for a month,' Minister Vroutsis said. For the period that the business makes use of this measure, it is prohibited to fire staff. If it does, this termination is void. In his address on Thursday, Kyriakos Mitsotakis outlined the government's financial measures following the ECBs latest decision and our QE status, stressing that Greece is no longer bound by the 3.5% primary surplus. Concerning the Easter bonus, the prime minister assured it will be provided to the private sector in full and included the country's medical and nursing staff, security guards and Civil Protection staff.

 

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