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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).

Incentive measures

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.

 

 

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