Govt to pay Kc15,000 monthly to sole traders hit by virus crisis

The government will most likely pay Kc15,000 monthly to self-employed people affected by anti-coronavirus restrictions as long as the measures are in place, Finance Minister Alena Schillerova said at a press conference after an extraordinary cabinet meeting.

Schillerova will prepare the relevant bill at the government meeting next Monday. "We will support sole traders that had to close their operations or cannot run business due to the anti-coronavirus measures," Schillerova said. The aid should be provided only to sole traders for whom self-employment is the only source of income. There are between 400,000 and 500,000 sole traders in the country, so the aid may cost over Kc7bn monthly, according to gross estimates, Schillerova said. The Chamber of Commerce welcomes the aid but wants it to be provided fast and without major bureaucratic obstacles, the chamber told CTK.

It is good that the government introduced direct subsidies for sole traders at least, but it should also consider introducing direct subsidies for firms affected by the current situation and liberating them from social security payments, said Bohuslav Cizek of the Confederation of Industry. Schillerova also wants to amend the law on consumer loans to enable entrepreneurs postpone their loan repayments, among other things. Schillerova wants to submit both bills to the Chamber of Deputies in the state of legislative emergency so that the Parliament could pass them in the week before Easter.

Sole traders have already been liberated from mandatory social and health insurance payments for six months, from March to August. In addition, Justice Minister Marie Benesova and the Finance Ministry are preparing an amendment to the insolvency law that would adjust the deadlines and conditions for debt relief, Schillerova also said. Government representatives and professional associations are also in talks about changes regarding distraint proceedings so that people are not under the threat of distraint during the time of the coronavirus epidemic, Schillerova said.

All measures will cost tens of billions of crowns, Schillerova said. Earlier this week, the Chamber of Deputies has passed the government-proposed rise of the state budget deficit from Kc40bn to Kc200bn.

Entrepreneurs will be able to apply for interest-free loans with one-year deferment of repayments under the COVID II programme, which, unlike the first programme, will also apply to sole traders and small businesses, Industry Minister Karel Havlicek said at the press conference. The minimum limit of the loans has not been set, while the maximum limit is Kc15m. The loans will be provided by most of commercial banks and will be guaranteed by state-run guarantee and development bank CMZRB.

The government has earmarked a total of Kc5bn for the COVID II programme. Thanks to the involvement of commercial banks, about Kc30bn will thus be available to entrepreneurs. The CMZRB guarantees will cover up to 80 percent of the commercial loans for three years. Under the previous COVID I programme, CMZRB received more than 3,200 applications for more than Kc10bn. Firms could apply for loans of Kc0.5m up to Kc15m. The Industry and Trade Ministry will prepare a package of measures to boost domestic tourism and help travel agencies that have big problems because of the government measures against the spread of the virus, Havlicek said.

The ministry wants to use state-run agency CzechTourism to motivate people to travel within the country, Havlicek said. The government should take effective measures to help firms in tourism keep employment levels, the Association of Hotels and Tourism told CTK in a press release today. According to the association, the existing system and the Labour Ministry's employment programme Antivirus are unlikely to prevent dismissals. Almost 90 percent of accommodation facilities and 75 percent of restaurants are closed in the country. A shortfall in tourism receipts may climb up to Kc400bn. Some 80 percent of businesses will have to fire 10 to 30 percent of employees, and further dismissals will depend on the government's aid and how it works in practice, the association said.

Source: ČTK