'Lockdown' aid measures for businesses could cost €150 million

The government plans to offset the drop in turnover due to Covid-19 restrictions and subsidize wages for affected companies. Overall, it will cost around €150 million, but other support mechanisms are also planned to be introduced later, Latvian Radio reported October 21.

Two main aid tools are planned for the companies affected by the restrictions: grants for the decrease of current assets and wage subsidies. The wage subsidies are planned only for workers who have at least started the vaccination process. The criteria will be further clarified by the Ministry of Economics, but it is planned that the aid will be received by those companies whose turnover falls by 20% or 30% in October.

These measures were described by Economics Minister Jānis Vitenbergs at the press briefing October 20: “Today, colleagues supported the subsidized wage program, which will integrate this downtime support program. It will focus on the employees of industries who will not be able to work under these circumstances. The other program is a funding program that helped thousands of companies overcome previous waves of Covid-19. I would like to say now that those sectors that will be restricted will have access to these support measures."

The Ministry of Economics will further clarify the criteria for support measures.

Grants for current funds are expected to account for 60% of the company's gross wages. The aid for employers to partially compensate for the remuneration of their employees is planned at 50% of the declared average monthly gross wages for the period July-September, but not more than €500 per month.

It is intended that the aid will only apply to workers who will have received at least one dose of vaccine against Covid-19.

The support program will only cover time until the end of the strict “lockdown”, said Finance Minister Jānis Reirs: “This program is up to November 15, period. We're not going to extend it. We have already spent very significant resources, we are now continuing to do so. In addition, we are now also starting to dip into the funds for our children but also threatening our ability to fund future crises that come from time to time.”

The Ministry of Economics plans to support only viable companies that have paid taxes. Sectors that are not significantly affected will be identified and will therefore not be eligible to apply for aid.

The Ministry of Economics forecasts that €120 million will be needed for grants, and €32 million for subsidies.

This approach is opposed by the economist Dainis Gašpuitis, who believes that vaccination should not be linked with aid at a time when the it is completely prohibited from working.

''Those sectors that are closed would also have to be supported without, say, a great deal of assessment and division," Gašpuitis said.

The support tools will still need to be coordinated with the European Commission, and the first aids are likely to be paid in December. The government's rules on criteria are scheduled to be adopted next week. 

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