COVID-19 crisis: Measures for business
Covid-19 crisis in Lithuania
UPDATED: 2020, 23 April
Additional financial solutions for businesses affected by COVID-19
The Lithuanian government is mitigating the support criteria and increasing the volume of loans for businesses in difficulty:
- the soft loan for working capital will be available to companies that will lose at least 30% of their turnover due to quarantine, instead of the 60% that has been established so far;
- the amount of soft loans was increased 10 times - from EUR 100,000 to EUR 1 million. Eur;
- companies will be able to pay up to 0.5 million with the funds borrowed from Invega. Eur partners' unpaid bills instead of the current 100,000 Eur.
Authorization for export
EU - an authorization is now required for export outside the EU of personal protective equipment (protective spectacles and visors, face shields, mouth-nose protection equipment, protective garments, gloves) - see Commission Implementing Regulation 2020/402 of 14 March 2020 below (which applies for 6 weeks).
1. Coronavirus Response Investment Initiative (CRII) – ca. 25 Bn EUR for 10 Member States in the CE
· announced by the EU Commission
· primarily as liquidity support for SMEs, investments in healthcare and financing short time working schemes (as well as support for fishermen where applicable)
· amounts defined for each Member State
· requires minimum 2-3 weeks (to complete EU decision-making) to have the amounts formally available for Member States
2. Beyond CRII, if a EU Member State in CE wish to support individual companies / group of companies (e.g. sectors)
· gravity of COVID-19 impact (as least for now) is assessed – Italy (so far the only country but Spain and a few will probably follow w/n 1-2 weeks) is considered where there is a “serious disturbance to the economy” (treated under Article 107(3)(b) TFEU) where the EU Commission approves additional national support measures while impact of COVID-19 considered as “exceptional occurrence” in all the 10 Members States in the CE (treated under Article 107(2 (b) TFEU)
· there is a fast track approval process (compensation scheme submitted by Denmark was the first last week where the EU Commission approved a total budget of 12 M EUR within 24 hrs to compensate organizers due to cancellation of events because it was proven that the damages are directly caused by COVID-19 (as“exceptional occurrences”) - We are currently analyzing similar cases to define scope of potential eligible costs and give input to design similar national measures
· our large clients (MNCs or LNCs) could either receive aid as a sector, or as individual companies based on Article 107 (2)(b) TFEU to compensate for direct, proven and quantified (capped) COVID-19 damages
3. EU Member States could escape EU state aid rules, and spend own budgetary sources as they wish, if they introduce general measures – such as
· support for public health / health services
· measures targeting any groups of individuals (i.e. as long as the ultimate beneficiary of that support is not the employer/company)
· measures available for all companies (e.g. liquidity, relaxing tax payments, delaying tax/reporting deadlines, etc.) – however this approach cost dearly for the national budget
+ General state aid rules are applicable (COVID-19 does not mean that Member States can save/compensate any company as they wish!)
++ Soon rescue/restructuring aid rules will probably be eased (similarly to the 2008-2010 crisis)
+++ Special measures, to some extent, apply for tourism and transport sectors.
The Professional Partnership of Advocates “Deloitte Legal”, its employees or representatives are not responsible for the information and consultations provided here: www.deloittelegal.lt, i.e. advice should not be considered as professional legal consultation or service. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional legal advisor individually.