Greek Finance Minister Christos Staikouras on Wednesday gave details on a new Covid-19 economic response package, aimed to cushion the blow for businesses and the livelihoods of workers.
Speaking after Greek Prime Minister Kyriakos Mitsotakis gave a televised address, who announced the package as well as when the Greek tourism season would start, Staikouras said the government’s new measures will be put in force in June and run until October.
Referring to the June-October timeframe as Greece’s “phase of progressive economic recovery”, the minister said the new support package was based on four pillars:
1. Continuing and expanding employment support measures.
2. Further enhancing business liquidity.
3. Obtaining targeted tax measures.
4. Dealing with private debt.
Staikouras then presented the 15 policies of the new economic support package, which adds up to 24 billion euros (including funds from the European Investment Bank and the SURE program).
1. Expansion of a measure that allows employees to suspend the contracts of workers. The measure includes payment of a compensation and covers social security contributions. The sectors of tourism, food, transport, culture and sports are included in the measure.
2. A new short-term employment support mechanism – dubbed Syn-ergasia – has been created to save jobs and support entrepreneurship.
3. All seasonal employees in tourism who will not be hired this season will receive an unemployment benefit. Also, the social security contributions of the tourism sector’s seasonal part-time workers will be subsidized.
4. Businesses that remain closed, including those in the sectors of tourism, food, transport, culture and sports, will be able to their suspend debt payments to the tax authority for the month of June.
5. The measure allowing a 40 percent reduction on rent payments for all businesses that remain closed, has been expanded for June. The measure applies to enterprises that reopened in May, including retail; individuals (for their primary residence) whose work contracts are suspended; and students. In addition, for businesses of the tourism, transport, culture and sports sectors, the specific measure applies for the months of June, July and August.
6. Owners of real estate that lease properties to businesses and employees that have been hit by the pandemic, can receive a suspension of tax payments. Also, for these owners, the government is offering the possibility for them to offset part of their lost income, with their tax obligations after July.
7. Businesses will be offered a second round of refundable advance payment, based on the loss of turnover for the months of March, April and May.
8. Companies that have a decrease in turnover in March, April and May, can receive a reduction of advance tax payments for 2020 and 2021
9. The value-added tax (VAT) on all transport (train, metro and tram, city and intercity buses, airplane, ferry) will be reduced from 24 to 13 percent for the June 1 – October 31, 2020, period.
10. The VAT on coffee and non-alcoholic beverages will be reduced from 24 to 13 percent for the June 1 – October 31, 2020, period.
11. The VAT on travel packages will be reduced from from 80/20 to 90/10 for the June 1 – October 31, 2020, period.
12. The VAT on tickets to open-air cinemas will be reduced from 24 to 13 percent for the June 1 – October 31, 2020, period.
13. A tax cut on scientific and technological research of businesses that will take place from September 1.
14. Creation of a National Registry of Startup Businesses in line with international standards. Incentives (tax deductions on the amount invested) will be given to individuals who contribute as “angel investors” to start-ups.
15. The government will create a program that will subsidize for a specific period of time primary residence borrowers hit by the pandemic; help cover non-performing loans existing before the end of 2018 and after (until today) of the citizens affected by the crisis; and help cover loans that were performing prior to the pandemic and are now in trouble. Strategic defaulters will not benefit from the loan subsidy.
Staikouras said that from the next phase, which should begin in autumn, and the more the economy stabilizes and regulates, the government will have more opportunities to launch more permanent policies, so that Greece “can take off from where it was before the pandemic”.