Govt announces EUR 1bn package to mitigate coronavirus impact

Govt announces EUR 1bn package to mitigate coronavirus impact

The government is preparing a stimulus package worth a billion euro to mitigate the impact of the coronavirus on the economy. Short- and long-term measures such as tax deferrals, state guarantees and credit lines are planned, mostly from existing financial facilities, Economy Minister Zdravko Počivalšek said Monday.

The measures are designed to provide liquidity to businesses, preserve jobs, reduce losses and make sure companies' market position does not deteriorate, Počivalšek said after a session of the council for competitive and stable business environment, an advisory body.

Of the total amount, roughly EUR 600 million will come from existing financial mechanisms available at SID Banka, the state-owned export and development bank, which will also provide EUR 200 million for new measures.

The Slovenian Enterprise Fund will have EUR 115 million available for small and medium-sized companies, while the Slovenian Regional Development Fund will offer a scheme under which companies will be able to roll over debt.

An emergency law will be adopted to co-finance temporary lay-offs. Over EUR 51m will be set aside for companies that have to temporarily lay off more than half of their staff. The state would provide 40% of wage compensation in such cases, according to Počivalšek.

The Economy Ministry has EUR 6 million at its disposal to help companies in trouble and may activate EUR 20 million for guarantees.

The currently stringent rules on telecommuting may be relaxed in the event of emergency, but they will be additionally liberalised with a special emergency law. "We want to facilitate flexibility," said Tilen Božič, state secretary at the Labour Ministry.

There are already rules in place allowing companies to defer tax liabilities, but the currently stringent conditions will be relaxed.

The financing of tourism promotion will be stepped up to help an industry that is already among the worst hit by the global spread of coronavirus.

Počivalšek said it was necessary to be prudent without causing panic. "I'm an optimist and I am confident we'll be able to shield our economy to the maximum extent from major impacts of the coronavirus crisis."

Slovenia had 23 confirmed COVID-19 cases as of Monday afternoon and the spread of the disease has already prompted some companies to advise workers to stay home if they suspect they or their family members may be sick.

Health insurance rules stipulate that workers ordered by the authorities to self-isolate because they are considered as high-risk persons are entitled to full compensation of pay that their employers must provide.

The same goes for persons who had recently visited areas strongly affected by coronavirus but are healthy. They may be asked by their employers to stay home, but they are entitled to full pay.

For persons confirmed to have COVID-19, the Health Insurance Institute (ZZZS) covers 90% of pay from the first day of absence from work, meaning that employers do not have to pay them wages.

Normally, employers cover the first 31 working days of sick leave, whereupon the ZZZS covers their sick pay.

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