Support Measures Implemented Following Lockdown
Comprehensive Aid for Direct and Indirectly Affected Companies
France Limits Beneficiary Industries Starting This Year
[Asia Economy Reporter Kim Bo-kyung] There is heated debate over the legislation of loss compensation. European countries, which were directly hit by the COVID-19 pandemic, are also introducing and promoting various types of loss compensation systems. However, it is not easy to find cases where loss compensation is legislated and implemented every time a disaster occurs.
According to KOTRA Overseas Market News on the 23rd, major European countries provide partial loss compensation to businesses and self-employed individuals affected by COVID-19, but it is difficult to find countries that have legally stipulated this.
Earlier, Kim Yong-beom, the 1st Vice Minister of the Ministry of Economy and Finance, stated regarding the loss compensation law for self-employed and small business owners, "Based on a preliminary review of overseas cases, it is not easy to find countries that have legislated such laws."
European countries do not limit the beneficiaries to self-employed and small business owners but provide overall support to companies that have suffered direct or indirect damage due to business suspension measures.
In particular, alongside loss compensation systems, they implement support measures to promote corporate investment or operate the scope of loss compensation and support levels flexibly depending on the COVID-19 situation.
◆France restricts beneficiary industries from this year... support funds increased=The French government has been implementing a large-scale solidarity fund support policy since March last year for self-employed individuals and companies affected by COVID-19.
They provided up to 10,000 euros per month to companies that suspended operations due to lockdown measures, as well as companies directly affected by COVID-19 such as hotels, restaurants, cafes, and tourism, and indirectly affected companies such as food, wine, and liquor industries.
Even if not classified as directly or indirectly affected industries, all companies with fewer than 50 employees that experienced a sales decrease of 50% or more compared to the same month of the previous year were supported for sales losses up to 1,500 euros per month.
However, the French Ministry of Economy and Finance announced that from January this year, it will restrict the beneficiary industries of the solidarity fund but significantly increase support funds for eligible companies.
The support measures for beneficiary industries remain the same as last year but are limited to industries that were forced to suspend operations by administrative orders or those severely affected directly by COVID-19.
Accordingly, the monthly 1,500-euro support system for all companies with a sales decrease of 50% or more compared to the same month of the previous year will be discontinued.
Additionally, from this year, support will be provided up to 70% of fixed costs only to companies in suspended industries such as restaurants and cafes or affected companies such as hotels with sales exceeding 1 million euros in the same month of the previous year.
◆Austria provides up to 14% investment support funds= The Austrian government compensates up to 80% of the previous year's sales if local companies prove damage caused by COVID-19.
However, it also simultaneously utilizes corporate investment promotion policies to overcome COVID-19. It provides 7% of the total investment cost as investment support funds.
If the investment field corresponds to one of the government-promoted areas such as digitalization, eco-friendliness, or health and life sciences, an additional 7% is supported, allowing companies to receive up to 14% in support funds.
The Austrian government allocated a budget of 1 billion euros (approximately 1.345 trillion KRW) for investment support funds. Applications will be accepted until the 28th of next month.
Kim Chang-seok, head of the KOTRA Vienna Trade Center, said, "The opposition party questions whether the budget will effectively contribute to overcoming the crisis," adding, "It is necessary to monitor the progress as the local government shows a strong will for new and increased investments."
◆Germany, where the spread is not subsiding, provides additional support to companies, etc.= Germany plans to provide additional support for small business owners, self-employed individuals, and companies that suffered sales losses due to the hard lockdown implemented from December 16 last year.
Small and medium-sized enterprises with sales under 500 million euros, freelancers, and one-person businesses that experienced significant sales declines due to COVID-19 last year will receive up to 200,000 euros in non-repayable support.
For companies that closed operations in the first half of this year due to the hard lockdown, up to 500,000 euros per month will be supported.
Germany’s COVID-19 death toll has surpassed 50,000 cumulatively, and the spread is not easing. The strengthened hard lockdown measures will be implemented until mid-next month.
Germany has prepared a total budget of 37.5 billion euros as an extension of existing measures to support companies severely affected by COVID-19. Additionally, 30 billion euros will be invested as general support to cope with the COVID-19 pandemic.
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