Tax cuts, government subsidies for wages and sickness, favorable loans and direct financial assistance are some of the measures developed and announced by developed countries around the world to support the economies of their countries.
How does all this reflect on the strategic decisions of the South East European Authorities and what are the measures they are currently taking?
Slovenia
The Slovenian government presented to the public a proposal for a comprehensive legal package to mitigate the effects of the crisis due to the pandemic of the corona virus, and Prime Minister Janez Jansa said that sufficient funds have been provided for this purpose.
Jansa did not state how much is planned for the said legal package, but sources close to the government said it was more than three billion euros.
“An epidemic-mitigation package, or a mega-law” with a series of measures, should, through financial incentives and government assistance to citizens and the economy, help overcome the effects of the first few months of the crisis, the Slovenian Prime Minister said in a statement, adding that the government would , should the crisis continue, it would propose another similar package of measures.
The proposed legislative package of measures will finally be formulated by the government on Friday and put into parliamentary procedure, Jansa said, adding that there is “enough money” for the measures at the current stage and that measures are being taken at EU level to loosen financial and monetary discipline so far. Member States could better cope with the major crisis.
Subsidies, incentives for emergency services, pay cuts
The measures proposed by the Slovenian government are aimed at preserving existing jobs, continuing businesses and enhancing their livelihoods, provide tax breaks and deferrals of payments, preserve the social stability of the country, and allow flexibility in the allocation of salary supplements to key services during the epidemic.
Among other things, the state will subsidize employers ‘pay on standby’ for the next two months for employers due to production downtime, and instead pay employers for health and retirement benefits, as well as sickness benefits.
For key activities during the epidemic, such as health, civil protection and other key services and services, Jansa’s government suggested that because of the workload, they could receive wage supplements ranging from 10 to 200 percent over the base.
Workers who are unable to work at the time of the epidemic will have the same status and rights as those who have lost their jobs and are being compensated, and pensioners with the lowest pensions will receive a special pension allowance during the crisis of the virus corona crisis.
Those who work as “self-employed” (micro enterprises with one or two employees) will be entitled to receive a monthly income of 70 percent of the minimum wage from the state, and their contributions will also be paid by the state and will not have to pay a monthly advance for income tax because will be without revenue, the package of measures suggested.
Regarding the need to strengthen the liquidity of companies in times of crisis, the government proposed the so-called “guarantee scheme”, so that they will buy out the claims that banks have on companies, and it will freeze until further payment of income tax.
The unused funds from the European Social Fund available to Slovenia will be channeled into research and development, especially in the development of medicines, vaccines and the production of healthcare equipment, Jansa said at a press conference.
A measure that will spark a lot of divided opinion is the proposal to cut salaries for all officials, including members of parliament and government, by 30 percent during the crisis, and a proposal that the same applies to the judiciary, with the exception of those court-related workers which cannot be delayed.
The Jansha government also proposes that state-owned companies be reduced and paid by supervisory boards by 30 percent.
Croatia
The Croatian Parliament has adopted a government package of measures worth almost 30 billion kunas (3.9 billion euros) to help the economy affected by the virus corona epidemic. The package contains 63 measures aimed at preserving jobs and paying salaries.
These measures will allow entrepreneurs and citizens affected by the virus to defer payment of public duties, such as income and income taxes, and contributions.
Payments will be delayed for three months, with the possibility of extension to three more. Subsequently, it will be possible to repay these debts in installments without interest for a period of 24 months.
The state will support the conservation of jobs in epidemic-affected sectors by helping, at the minimum wage, any employee who would lose their job. Self-employment and employment measures are temporarily suspended and funds are re-allocated to retain existing employment.
The set of measures for financial liquidity, according to Finance Minister Zdravko Maric, includes a moratorium on liabilities to HBOR and commercial banks for three months, approval of liquidity loans for payment of salaries and suppliers and rescheduling of other liabilities.
Maric says it can be expected that citizens will be allowed to defer payment of credit installments, also for three months. He also announced interest-free loans to municipalities, cities and counties, the Croatian Health Insurance Institute (HZZO) and the Croatian Pension Insurance Institute (HZMO) up to the amount of income tax, taxes and contributions whose payment has been deferred and / or installment payments are approved.
Montenegro
A press conference was held in Montenegro last night, with Prime Minister Dusko Markovic and Central Bank of Montenegro Governor Radoje Zugic announcing a set of economic measures adopted by the Government of Montenegro to remedy the effects of the emergence of the virus corona.
It is planned to delay the payment of loans to businesses and citizens for 90 days, to delay the payment of taxes, as well as to create a new line of IRF to help the economy up to a maximum amount of up to three million euros per beneficiary. The government has also earmarked one million euros to help the most vulnerable. The Prime Minister also said that the members of the Government will pay half of their salary at one time into the account of the National Coordinating Body for Infectious Diseases.
Payments of the variable part of earnings and all budgetary remuneration for work in committees, boards of directors will also be suspended. It is recommended that local governments do the same.
The prime minister also said that the payment of rent for state-owned real estate was delayed for 90 days, and all payments from the budget would be regular.
All banks in Montenegro provided mechanisms for the regular supply of ATMs with cash, and fees for withdrawing money from ATMs and fees for using electronic payments were also suspended.
Banks continue lending, while the Central Bank of Montenegro (CBCG) will provide a legal basis that would relax banks to restructure loans whose delay is justified by the current situation.
Northern Macedonia
The government of Northern Macedonia has decided to close kindergartens, schools and colleges by March 24, and since children will not go to school, it has been decided to release one parent of children up to ten years of age, until kindergartens and kindergartens are completed.
The state has taken on the wages of these parents in both the private and public sectors.
Bosnia and Herzegovina
Bosnia and Herzegovina, Entity Republic of Srpska
Radovan Viskovic, the President of the Staff for Monitoring the Coronary Virus Influence on the State of the Economy of the Republic of Srpska, said that the Government of Srpska will prolong the payment of corporate income tax until the end of June, and it will be a measure that will address the companies that suffer the damage from the corona virus.
“One of the measures we have promoted is for commercial banks to put a moratorium on repayment of loans,” Viskovic said in a public address after a staff session. Viskovic, who is also the Prime Minister of Srpska, has asked companies not to lay off workers, because they will discuss how to help businesses.
Republika Srpska has passed an exam in epidemiological measures to prevent the spread of coronary virus and has received confirmation from the World Health Organization. The question now is what economic measures to take to save the economy, that is, the economy.
Employers, like everyone else, do not know until when the pandemic will last, but fear for businesses. According to the fitting system, workers in the economy are also uncertain every morning. Someone goes to work every day, some work from home, and some, such as caterers, tourism workers and certain traders, are unable to work at all.
Quite logical questions are about the certainty of personal income, payment of loan installments, taxes on utilities and telecommunications companies.
At the Employment Service of the Republika Srpska, we checked how many people had turned to the issue of financial compensation since the declaration of emergency in the Republika Srpska because they were fired as technological redundancy. Thus, from 16 to 24 March, ie in eight days, 168 persons approached the request for exercising the right to financial compensation. These are former employees in the field of construction, tourism and hospitality. We remind that caterers are forbidden to work because of the epidemiological situation, and everything in tourism has stopped.
By comparison, since the beginning of the year, a total of 2,697 cash applications have been submitted, and 1,717 applications have been approved.
The minimum amount of paid cash compensation this year is 416 KM, and the highest is 906 KM.
Goran Stankovic, secretary general of the Union of RS Unions, told Srpskainfo that in this situation, the Labor Law is in force, which defines under what conditions it is possible for an employer to dismiss a worker.
We are in constant contact with the representatives of the Government of the RS and we expect measures in a few days. The situation is more thankless because no one knows until when the pandemic will last – states Stankovic.
He says there is no information in the union about laying off workers at firms that have union organizations.
Serbian Presidency member Milorad Dodik says the ERS distribution company will not turn off electricity to consumers who do not pay their bills during an emergency. Asked if they have received guidance, the ERS says they are preparing a set of measures that will facilitate business for the economy, as well as citizens affected by measures resulting from the coronary pandemic.
– In any case, we invite all those who can pay their obligations on time so as not to jeopardize the operation of the ERS itself, but also the production of electricity – this public company states.
Banja Luka’s Water Supply, which supplies the most consumers in the RS with drinking water, says that even before declaring an emergency, they had an understanding for consumers, especially for those categories that for some reason could not settle their bills on a regular basis.
– During an emergency, we will not exclude any consumers from the water supply network – they say from “Water Supply”, which urge consumers to take maximum care of their water consumption and to act rationally.
The Republican Emergency Management Staff recommended that utility companies, ERSs and telecom operators not accrue default interest in this period to consumers who would not be able to pay their bills.
The government pays taxes and contributions
RS Prime Minister Radovan Viskovic said the government had decided to pay taxes and contributions for workers from the hospitality industry and partly from shops, provided employers pay a net salary to employees.
– Analyzed the situation from the field and at the end of March we will have more specific data. In any case, we will help the economy and employers on condition that they do not lay off workers – Viskovic said.
Bosnia and Herzegovina, Entity Federation of Bosnia and Herzegovina
Minister Dedic: Put KM 15 million of earmarked funds into the function of food production
Federal Minister of Agriculture, Water Management and Forestry Semsudin Dedic on Friday submitted to the procedure for amendment of the Law on Agricultural Land of the Federation of BiH.
The amendments would allow the earmarked funds from the conversion of agricultural to non-agricultural land, provisionally until 30 June 2021, to be made available to cantons to support spring and autumn sowing.
– These cantons have around KM 15 million in accounts. This is an enormous amount that needs to be urgently put in place to increase agricultural production. The funds would be used on purpose. Last week, the Government of the Federation of BiH increased the amount earmarked for co-financing various start-up and sowing programs by KM 9 million. With these additional 15 million KM, we could further strengthen our agriculture. One of our priorities in this period is to cultivate and sow as much available agricultural land as possible, or to produce as much food as possible. Most cantonal ministers responsible for agriculture supported this proposal – says Minister Dedic.
He emphasizes that there are several legal solutions in the Federation of BiH that require urgent changes to enable the use of earmarked funds in line with current priorities.
– Most of the earmarked funds are collected in the budgets of different levels of government each year and are not spent due to lack of projects. One example is the multi-million dollar funding for the construction of public shelters in the budgets of cities and municipalities, for which a law on their use has already been initiated. I think that the Government of the Federation of BiH should analyze and amend all legal solutions that treat the earmarked funds in the budgets of all levels of government to enable them to be used to support health care, the real sector and job retention – Dedic said.
In order to make this and other decisions, it is necessary to find modalities for holding sessions of the FBiH Parliament or to consider that the Government of the Federation of Bosnia and Herzegovina issues Regulations with legal force.
– In this state of emergency, fast decision making is very important and the best message to the citizens is that the Government and Parliament of the Federation of BiH work continuously. The most important thing at the moment is safe citizens’ health, but we also need to think about the economic consequences that, if we do not act on time, could be incomprehensible – concluded Dedic, the Federal Ministry of Agriculture, Water Management and Forestry said.
The Federation of Employers of FBiH is shocked by the seriousness of the measures proposed by the Government of the Federation of BiH. Obviously, they are either unaware of the gravity of the situation or are not interested in the situation of the economy and workers in the real sector. It is said that the workflows and tens of thousands of jobs in companies are threatened by the coronavirus pandemic, according to the UPFBiH.
“We emphasize that life and health are paramount and support all measures taken by the competent authorities to prevent the spread of the infection, but such measures must be accompanied by a set of other economic measures. It is utterly unacceptable that tens of thousands of workers lose their jobs due to the prohibition of work in certain industries or the inability to work. We urge the FBiH Government, the Federation of Independent Trade Unions of BiH, to urgently reach an agreement that for workers who would lose their jobs, part of the burden will be borne by the state, part by employers, and part by the workers themselves, ”the UPFBiH said.
The UPFBiH once again urge the FBiH Government to facilitate continuous daily communication with the Crisis Staff established by the UPFBiH and the FBiH Chamber of Commerce. If they do not know what to do, look at the measures and solutions in place in other countries.
“It is completely unacceptable position and not advertising of the FBiH Banking Agency regarding the proposal of the Employers Crisis Staff to introduce a moratorium on repayment of loans for legal entities and individuals.
We call on the lower levels of government, cantons, cities and municipalities to urgently adopt measures within their jurisdiction that will mitigate the effects of the coronavirus pandemic on the economy and jobs.
In addition to prioritizing the protection of people’s lives and health, priority must be given to safeguarding jobs and the economic security of workers, ”the UPFBiH said.
Serbia
Measures to recover the Serbian economy will be unveiled on Tuesday, Blic Business confirmed.
Although Serbian President Aleksandar Vucic has announced that a program of recovery measures for the Serbian economy affected by the coronary virus will be presented today, according to the latest information, it will be presented on Tuesday.
Vucic had earlier announced that it would be an impact assessment program, funding method and implementation technique and technology, with the aim of recovering the economy from the effects of the virus epidemic.
The president pointed out that the Serbian economy was suffering and that a number of companies were forcibly reducing production, but that a large part of them did not lay off workers because of it.
A few days ago, Vucic said it was a serious program that would show that Serbia can get out of the economic problems that the corona threw it faster than others.
He stressed that there will be no reduction in salaries and pensions, and “in addition to and after the lives of the people, who are most important, measures are crucial.”
Kosovo
Kosovo entrepreneurs have assessed that the measures taken by the Government of Kosovo to prevent the virus corona caused difficulties in the functioning of the enterprise, regardless of the sector in which they operate, especially when it comes to the hotel, restaurant, cafe sectors because of their inability to perform their core business as well as in the tourism sector.
Representatives of the Kosovo Chamber of Commerce, the American Chamber of Commerce, the German Chamber of Commerce, the Council of European Investors and the Kosovo Producers’ Club said in an interview with the Prime Minister and other officials in charge of economic affairs in the Government of Kosovo that they were experiencing an abnormal increase in demand for certain products, difficulties in international freight transportation, rising shipping rates, final products, but also raw materials.
“Also, the situation created after the onset of the pandemic Kovid-19 caused panic and total disruption in the market, which is reflected by the immediate decline in demand for products and services, a decrease in contractual obligations and a decrease in cash flow. Many companies warn that in April they will not be able to retain workers and continue to pay, which will immediately result in a drastic reduction in employment in the private sector, ”said representatives of Kosovo entrepreneurs.
They warned that the biggest problems were related to the refusal of employees to come to work, based on the Government’s decision to organize work from home where possible, but also because of family pressure.
There have been many complaints about the intervention of inspection bodies. In some cases, inspectors placed circular strips (barring access) on shelves of non-food and non-hygienic products, in clear opposition to the government’s decision.
Another problem encountered by business enterprises in Kosovo was the ban on entry of foreigners into Kosovo, which affected the transport companies, ie vehicles operated by foreign nationals, which caused problems in the supply of goods given the fact that consumption in Kosovo in is highly dependent on the products being imported.
A serious problem is the ban on interurban transport, which has created major problems in the transportation of employees from and to their workplaces, as well as inland transport, which is organized or contracted by the companies themselves.
Given the fragility of private companies and the lack of liquidity, the crisis caused by the virus virus will result in the bankruptcy of many businesses and the creation of many jobs, and if this could lead to the destruction of Kosovo’s economic base and return the country many years back, businessmen said.
They demanded that the Government urgently develop adequate measures to support the private sector in Kosovo and offered the Government a proposal for measures to support the private sector in order to mitigate the impact of the crisis to the fullest extent possible.
They demand that the government publicly support the proposed measures to eliminate panic in the market as well as the private sector in order to restore market normalcy and take all measures to ensure sufficient liquidity in the country’s economic system, both in the public and private sectors.
It also requires close cooperation with private sector representatives and experts in the field over the next seven days to develop a detailed program of financial incentive packages to support the private sector, in order to achieve this goal of minimizing damage to the country’s economy.
Sources: (blic.rs, fbihvlada.gov.ba, profitiraj.ba, today.rs) / balkantimes.press