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

Friday, March 20, 2020

The new set of supporting measures which was announced by the Greek Government, aiming to moderate the severe results of the corona virus epidemic on country’s struggling economy, consisted of a series of State aid tools concerning enterprises and professionals who have been harmed by the current crisis, even though they have not been directly submitted to an obligatory business lockdown.

In this context, employers who suffer considerably due to the Corona virus situation (but have not been ordered to shut down) may place their employees in suspension, in whole or in part, for a period of one month. The State will define the employers who are entitled to this measure on the basis of their tax codified activities as declared in the tax authorities.

At the end of the suspension period, the employer must keep the same number of employees. While in suspension, employees may not be dismissed, otherwise the termination is invalid.

State reinforcements granted to businesses which are directly affected by the imminent prospect of a hurtful economic recession, due to the epidemic, presuppose that jobs are safeguarded and employers shall abstain by any action of layoffs should they wish to enjoy the supporting state benefits included in the new set of measures.

The benefit of 800€ is extended and will be distributed also to workers suspended by employer's initiative, self-employed professionals and single-member entities which have not suspended their operation by state order but they do suffer big loss of revenue due to the crisis, as well as to workers which were dismissed or forced to resign from their jobs in the time period between 01.03.2020 and 17.03.2020.

Other provisions to be adopted by the government refer to State funding of businesses and corporations in the form of a “returnable deposit”, in order to provide mid-term financial support to the business sector, which is expected to lose revenue and to assume the burden of salary and non-salary costs during the crisis.

On March 19 Greek Authorities announces suspension of hotels operation until the end of April. The order applies to hotels with year-round operations. Exceptions: a) only one hotel in the capital of each district area and b) 3 hotels in Athens and Thessaloniki will remain open. This resolution will be applicable from midnight of 22 to 23 March.

It was also announced that value-added tax (VAT) on products that help contain the spread of the virus, such as gloves, masks, antiseptics and hygiene products in general, is reduced from 24% to 6% until the end of the current year, while adjustment of real estate objective value is suspended for next year.

Furthermore, the Independent Authority for Public Revenue (“AADE”) will immediately proceed to pay tax refund arrears of the Greek state which have been due towards businesses and natural persons.

In continuation to the above, the Greek Government declared that, in coordination with the Bank of Greece and the Hellenic Bank Association, financial facilitation will be granted to coronavirus-affected companies, such as provision for payment only of the interest due until September 30th  in “performing” business loans currently in force, implementation of capital - lending mechanisms in order to alleviate small and medium-sized businesses and provision of liquidity to banking institutions, of up to 2 billion euros, in order to support granting of new low- interest business loans to the affected entities.

It is noted that banking institutions and loan managers decided to finally expand issuance of financial facilitation to natural persons harmed by the coronavirus crisis, too, by offering a suspension in debt payments to all individuals with loans that are being serviced and a three-month suspension of debt payments for employees, self - employed professionals and single-member businesses which are entitled to receive an 800€ benefit.

Last but not least, employees in the national healthcare system who are in the frontline of the fight against the epidemic will receive the Easter bonus, even though said benefit had been abolished in the public sector, during the economic crisis. The measure will affect 108.000,00 workers in hospitals, the EKAB ambulance service, the country's National Public Health Organization (EODY) and civil protection authorities, whereas businesses will be allowed to postpone the payment of the Easter bonus to their employees until the summer.

Rapid developments on the current crisis are expected day-to-day, composing a new and unfamiliar social and economic mosaic. The respective legislation which is expected to be soon adopted by the Greek State will regulate all the above matters in clarity and it will provide specific definitions and guidance for the implementation of the measures.