Minister of Finance Announcement on Additional measures – Aid to Small Businesses and Self-employed, Loans to Businesses and Incentives for Rent-reduction

The Minister of Finance has announced additional measures of targeted support to businesses as well as the agricultural sector as part of the gradual lifting of restrictions. The measures were approved by the Council of Ministers and will be placed for approval by the House of Representatives as the law on the “support of businesses based on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak”.

In verbatim:

“ This law provides for aid for small businesses and self-employed people, i.e. very small businesses and those that employ up to 10 people, as follows:

  1. Businesses in full suspension until May 3: €2625
  2. Businesses that continue to be completely suspended after May 4: €3500
  3. Businesses in partial suspension until May 3: €1875
  4. Businesses that continue to be in partial suspension after May 5: €2500
  5. Self-Employed persons in full or partial suspension until May 3: €1125
  6. Self-Employed persons that continue to be in full or partial suspension after May 4: €1500

This ensures significant assistance to small businesses to meet needs during the crisis, such as rent, debts to suppliers or other operating expenses.

It is pointed out that in parallel with the plans of the Ministry of Labour, a large part of the salary costs of these businesses is being covered.

It is calculated that up to 40,000 businesses may benefit from this provision.

The law also provides for liquidity to businesses through guaranteed loans of 1.5 billion Euros as follows:

– 300 million Euros to very small businesses, which employ less than ten people

– 1 billion Euros to medium and small businesses

– 200 million Euros to large businesses

  • The guaranteed loan percentage for very small businesses and self-employed workers will be 85% by the state and 15% by financial institutions, while for medium and large businesses 70% of the guarantee will be covered by the state and 30% by financial institutions.
  • The loans will be given for a period of three months to six years by the financial institutions, with very favourable terms and a favourable interest rate.
  • The total liquidity that may be channeled into the market through guaranteed loans will be around € 6 billion.

The two parts of the plan, namely the aid and the guaranteed loans, are complementary to each other and one cannot replace the other.

In addition, and especially with regard to Rents, the two other bills, which were approved by the Council of Ministers, concern incentives for further reduction of rents.

Specifically, they concern owners who rent real estate to individuals or legal entities and reduce the rent for a period of three months, in order to facilitate tenants who have been affected by the COVID-19 pandemic.

The law provides that they will receive a tax relief of 50% of the rent reduction amount, provided that the rent reduction will not be less than 30% and no more than 50% of the monthly rent.

The full officially translated speech of the Finance Minister can be found HERE.