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Exceptional measures announced by Greek Government to support workers and enterprises due to the corona virus epidemic

Thursday, March 19, 2020

A new set of supporting measures was announced yesterday, by the Greek Ministry of Finance, in order to limit the effects of the corona virus epidemic on the economy. These guidelines are included in a general package of governmental initiatives to tackle the challenges that have emerged due to the spread of COVID-19 epidemic. 

The package, with a total worth of 3.8 billion euros, includes measures aiming to strengthen the public health system, such as acquisition of healthcare material, to boost the economy’ cash flow by funding enterprises which are directly affected by the imminent crisis, to protect workers and businesses by the results of the imposed shutdown and to subsidise liquidity to banking institutions in order to encourage issuance of new low – interest business and investments loans.

With regard to measures which are to be implemented in order to alleviate workers and businesses, and according to the official announcement made by the Minister of Finance, an estimated 200,000 businesses employing around 600,000 people shall be exempt from paying taxes and social security contributions until July 31st, while self-employed professionals and single-member businesses shall be relieved of tax obligations for a time period of four (4) months.

Furthermore, businesses which are being forced to suspend their operation will have to pay only 60% of the total amount of their commercial rent for the months March and April.

The government will also make use of an additional 1.8 billion euros derived by EU special funding, so as to boost liquidity to businesses, as well as employment and salary costs for workers. Government officials argue that the measures will grow and expand as time goes by, depending on how the coronavirus evolves, a fact that no one is able to forecast at the moment.

An important initiative concerns issuance of a benefit of 800 euros to workers whose employment contract has been temporarily suspended as a result of the shutdown of the majority of commercial activities throughout the country by public order. The benefit will be distributed in April and it shall refer to the time period from 15.03.2020 until 30.04.2020, while the State will cover social security and health insurance costs of the beneficiaries. Tax obligations corresponding to March are suspended for four (4) months, too.

In the above framework, businesses which are temporarily closed due to the Corona Virus (COVID-19) threat shall submit a solemn declaration with the ERGANI information system for businesses of the Ministry of Labor and Social Affairs, declaring that they are placed under temporary shutdown by public order. In this way, personal data of workers of said businesses will be confirmed by the information system and will be used at a later stage for purposes of approval of issuance of the financial benefit to each one of them.

Second phase of the benefit distribution mechanism foresees that workers who provide their working services to said businesses by virtue of an employment contract of any nature (fixed-term or of indefinite duration, full or part-time employment) shall submit a separate solemn declaration with an electronic platform which is to be developed by the Ministry of Labor for this special purpose; the application shall contain their personal data, their personal bank account details (IBAN) and the data of the business where they are employed, in order to receive the benefit in question.

It is noted that the use of electronic platforms, the operation of the benefit distribution mechanism and generally the navigation throughout the whole process as described above will be specified by legislative acts which are soon to be enacted by the competent Ministries.

Workers who a. are teleworking or distance-working, b. are currently under  working leave regime of any nature, c. are currently working as security personnel and d. hold an employment contract that currently remains in force and it is not suspended, are exempt from the above supporting mechanism and therefore they are not entitled in receiving the respective benefit.

Another protection tool in favor of workers of the examined category is the following: during the business shutdown period, dismissals and terminations of employment contracts for any reason are restricted and, in case they occur, they are automatically considered as invalid. This applies to employees of businesses that have been shut down by a Government order

It is expected that legislative acts which will set out the particulars regarding the implementation of the above measures will be soon adopted.