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Ceturtdiena 09.04.2020 | Name days: Valērija, Žubīte

Latvian government forms special group to support businesses and prevent Covid-19 damages

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Altum, state of emergency, support, Covid-19, Kariņš, coronavirus, Krišjānis Kariņš, important, state budget

Latvia’s Prime Minister Krišjānis Kariņš

Following Latvian Prime Minister Krišjānis Kariņš’s order, a government group for support of entrepreneurship and employed people for the prevention of economic consequences caused by Covid-19 coronavirus, as confirmed by the prime minister’s press-secretary Sandris Sabajevs.

Finance Minister Jānis Reirs will lead this group.

The group met for the first time on Monday, 16 March, at the Finance Ministry’s building. The group will continue the work commenced on Friday, 13 March, at the meeting organized by the prime minister with the governor of the Bank of Latvia, Finance and Capital Market Commission and other ministers.

Kariņš explained that the goal is coming up with a solution for businessmen and employed people that would ease the short-term economic problems from the global pandemic without forcing a halt of economic operations and laying off employees. The prime minister promised to come up with a solution in close cooperation with business organization and with respect of employees’ interests.

The government’s special group will include representatives from the Bank of Latvia, Latvian Employers’ Confederation, Latvian Chamber for Commerce and Industry, Latvian Free Trade Unions Association, Economy Ministry, Prime Minister’s office, State Revenue Service and Altum.

On 13 March Kariņš met with Bank of Latvia governor Mārtiņš Kazāks and ministers to discuss the reduction of Covid-19 effect on Latvia’s national economy. After the meeting it was announced that the government plans to allocate upwards of one billion euros to reduce the impact of Covid-19 coronavirus on the country’s economy.

The prime minister stressed that the impact of Covid-19 coronavirus on the global and Latvia’s economy will likely turn out short-term – no more than two months. At the same time, Kariņš admits the current situation is incomparable to a financial crisis experienced in 2008.

«Compared to 2008, we are in a good situation now, because this is not a structural crisis with excessive debts,» adds the prime minister.

He also reports that to assist companies negatively affected by the spread of Covid-19 coronavirus, the state is prepared to assist, and the total pool of funding reaches one billion euros. Part of the State Treasury’s funds will be available to companies through Altum and bank programmes, such as loan guarantees to assist them with short-term decline of turnover.

Finance Minister Jānis Reirs added that it is planned to provide companies with not only loan guarantees but also export guarantees using State Treasury’s funds. Additionally, support includes tax holidays. Current estimates show that because of the spread of Covid-19 the influence of sick leave papers is EUR 200 million.

When asked about sectors that may receive state support, Reirs stressed these include tourism, catering and accommodation sectors. State support will be provided to everyone who may experience serious difficulties.

Read also: Upwards of one billion euros to be allocated to reduce Covid-19 impact on economy in Latvia

To reduce the spread of Covid-19, Latvia’s Crisis Management Council declared a state of emergency until 14 April, shutting down all international passenger services.

It has also been decided to put on hold all cultural, entertainment, leisure, sports and religious events, as well as processions, protests and religious events.

After this meeting, Latvian Employers’ Confederation invited the government to find solutions to assist businesses as soon as possible. «LDDK respects the government’s decision, because a large number of infected people would create a much more serious impact on the economy than these restrictions,» said LDDK director general Līga Meņģelsone.

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