Aladrovic: Compensation Measures for Businesses to be Presented Early Next Week

ZAGREB, Nov 27, 2020 – Compensation measures for businesses affected by the new lockdown are expected to be discussed over the weekend and presented to employer organisations early next week and then to the public, Labour Minister Josip Aladrovic said after a meeting on Friday.

The meeting involved ministers from economy-related departments and representatives of the Croatian Employers Association (HUP), the Croatian Chamber of Commerce (HGK), the Croatian Chamber of Trades and Crafts (HOK), the Voice of Entrepreneurs association and associations of bar and restaurant owners.

The associations are seeking compensation for losses to be incurred during the lockdown.

“We have taken note of all the proposals and are taking a time out over the weekend to come up with concrete proposals,” Aladrovic said.

The job keeping measures in the form of between HRK 2,000 and 4,000 for workers’ wages remain in force, but will cover more people, and additional funds will also be provided, he added.

He said that Economy Minister Tomislav Coric and the SMEs agency HAMAG-BICRO had agreed an additional allocation of funds for “COVID loans” to help maintain short-term and medium-term liquidity.

Aladrovic said that two models of compensation were presented at today’s meeting, which had already been presented to the media, and that they would be examined in light of budget constraints. He added that he expected that some room would be found in the budget and that the government would be able to help the affected sectors.

However, he said it was hard to believe that either model would be accepted in its entirety, but he was confident that a consensus would be reached.

Aladrovic said that all the participants in the meeting had shown understanding for the government’s position, adding that measures would be defined over the next few days.

“The measures adopted so far have been timely and adequate and will be so in the future. Any raising of tensions is neither necessary nor acceptable,” Aladrovic said when asked by the press whether it wasn’t strange that these measures were not already in place.

Finance Minister Zdravko Maric said that dialogue would be much easier if it was known how long the coronavirus pandemic would last. He reiterated that the state budget must be strong and flexible enough to respond to all the challenges ahead.

Maric said that the measures for businesses affected by the latest restrictions and their fiscal effect would be presented next week. He said that the latest measures would be in force until December 21 and were narrower in scope than the spring lockdown.

The head of the national association of bar and restaurant owners, Marin Medak, said that everyone at the meeting had realised that the situation could not be resolved “with a snap of one’s fingers” and that no agreement could be reached today. He expressed hope that agreement would be reached next week to the satisfaction of both the government and bar and restaurant owners. 

Two models of compensation

Bar and restaurant owners on Thursday proposed two sets of measures to help them survive the new lockdown, saying that otherwise many of them would go bankrupt.

The first model envisages long-term compensation by slashing VAT to 5% for three years and to 13% over a longer term, and providing job-retention aid until April 2021, i.e. HRK 4,000 per employee and writing off taxes and contributions until 1 May 2021.

They also proposed compensation of €10 per square metre of their establishment, COVID loans to ensure liquidity for three years and a moratorium on loan payments for businesses which are not allowed to work.

The second model envisages ensuring revenue for entrepreneurs in the amount of 50% of their turnover at the same time last year as a direct grant which would also be used for salaries, including a contribution write-off.

This model also envisages exemption from all fixed liabilities for the duration of the lockdown, including rent and utilities. Exemption from parafiscal levies was also proposed.

 

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