Rimantas Sinkevičius: ‘We are working to achieve that the possible second wave of coronavirus could make as little impact on business as possible’

Date

2020 08 12

Rating
0
3745_55597b9b1605dd614af5b2eeeba6d65f.jpg

The Ministry of the Economy and Innovation seeking to minimize possible business losses which may be incurred as a result of the likely second wave  of the COVID-19 pandemic is ready to respond faster and better distribute the support  to businesses. The Ministry has already discussed several possible scenarios and action plans according to which the losses incurred by Lithuanian businesses could be minimised.

‘With increase in COVID-19 cases in Lithuania, the Ministry of the Economy and Innovation is already getting ready for the second wave of the coronavirus pandemic to minimize its effect on both national companies and the economy. Business, the society and the public sector already have experience in responding to such a situation and the necessary legislation is already in place to speed up the support. With the second wave, the focus will not be on bans, but rather on business support, ‘says Minister of the Economy and Innovation Rimantas Sinkevičius.

According to Minister Sinkevičius, with the start of the first wave of the COVID-19 pandemic, the existing business support measures were urgently adapted and new ones developed. The Ministry now has a full set of tools in place and we could quickly adapt some of the tools during the new wave to avoid previous mistakes and assess new challenges.

In the rise of the second wave of the COVID-19 pandemic, the instruments of ‘Loans to the businesses most affected by COVID-19’ and ‘Subsidies for micro-enterprises’ could be updated and adapted to the business needs.

Under the ‘Loans to the businesses most affected by COVID-19’ instrument, small and medium-sized enterprises were eligible for funding to cover basic operating costs, including salaries, rent or utility costs. ‘Subsidies for micro-enterprises’ is intended for businesses with 1 to 9 employees. Under this measure, micro-enterprises can receive non-refundable subsidies, which they can use for the working capital.

The quick impact instruments initiated under the coronavirus conditions have paid off.  Digitised instruments financed from the public funds, like subsidies for micro-enterprises, marketplace tax compensation or soft loans for businesses most affected by COVID-19, are widespread. These instruments have made it possible to provide access to the necessary funding for most affected sectors and small businesses during this particularly difficult period. Until 31 July, 3462 companies were granted soft loans of EUR 200 million.

It would be proposed to renew the use of the instruments in case new restrictions were to be introduced or economic and financial indicators should start to deteriorate.

If necessary, longer-term instruments the effects and mechanisms of which are felt over a longer period (interest compensation, portfolio guarantees for loans and leasing, factoring support, export guarantees, etc.) are planned to be continued until the end of the year or longer.

Based on the ‘Tourism Innovation’ instrument, it is planned to propose a new instrument for the tourism sector to enable a more efficient introduction of innovation and smart technology to provide tourism services in a contactless way and transform the tourism business model. Currently, the ‘Tourism Innovation’ instrument is designed to promote innovative activities in the tourism sector by creating and improving tourism services, providing information on tourism services and training employees of tourism companies.

According to Minister of the Economy and Innovation, the instruments have been improved since their launch and a balance has been sought between the efficient and responsible use of funds; yet, the recovery tempo of different sectors is unlike; besides, new challenges are emerging. Therefore, the instruments must be permanently improved, like, for instance, the improving of conditions of the rent compensation instrument or ensured better access to capital for exporting companies.