Minister of Economics: Operative government decisions are needed to support entrepreneurs due to the potential economic impact of Covid-19; ME offers specific solutions

13-03-2020

Today, the Minister of Economics Ralfs Nemiro submitted to the Government a plan of support measures developed by the Ministry of Economics for entrepreneurs to mitigate the effects of the coronavirus Covid-19.

 

“The emergency situation and the tightened security measures that have been put in place will affect all of us and the Latvian economy in general. The Ministry of Economics forecasts economic slowdown at around 1 percentage point. In order to minimise the negative effects of the spread of the virus on Latvia’s economy both on businesses and on employees rapid action and immediate government decisions are important at the moment. Today, I have submitted proposals to the government for support measures to reduce the impact of Covid-19 on the Latvian economy in general. I look forward to the availability of resources in the state budget to support entrepreneurs and the Ministry of Economics will quickly prepare a regulation for the implementation of aid instruments,” emphasises the Minister of Economics Ralfs Nemiro.

 

In recent weeks, the Ministry of Economic has organised a series of meetings with organisations and entrepreneurs from different sectors of the national economy in order to identify the current situation and challenges entrepreneurs are facing, as well as the opinions of entrepreneurs about the assistance and state aid they need. During these meetings, most entrepreneurs identified two challenges: lack of working capital, and retention and dismissal of employees in critical situations.

 

In order to address the lack of working capital, the Ministry of Economics proposes solutions in the field of taxes and to operatively develop new financial instruments. As a tax solution, we offer to actively use tax holidays for up to one year – such a regulation already exists, businesses should submit an application to the State Revenue Service to apply it. At the same time, we offer the government to assess the possibility of introducing a number of new financial instruments – extending the guarantee programme and the lending programme, as well as promoting venture capital investment. In order to boost the competitiveness of Latvian exporters during the crisis, export credit guarantees should finally be provided in Latvia.

 

In order to deal with retention and, in some cases, dismissal of employees, we propose an agreement between the government, employers and trade unions that employees are simply placed on unpaid leave, for whom the financial sector accordingly freezes liability payments until the process normalises. The Ministry of Economics will offer employees of individual sectors support for organising training for up to two months, thus keeping jobs. It is also important to provide support for requalification of workers and to review the procedures for paying sick leave certificates.

Last update:    25-05-2020