Parliament passes EUR 2bn loan guarantee scheme
Following initial emergency measure geared at preventing layoffs and protecting vulnerable groups and ahead of additional incentives meant to kick-start growth, the second stimulus package provides liquidity for businesses through a EUR 2 billion guarantee scheme for loans from commercial banks.
Loans to micro companies and SMEs will be guaranteed for up to 80% of the principal, and loans to large companies up to 70% of the principal. Banks will get guarantees for loans with a maturity of five years issued between 12 March and 31 December 2020, and intended exclusively for financing the company's principal activity.
Prime Minister Janez Janša told MPs the EUR 2 billion would suffices to keep companies from giving up on production that still has promise or from layoffs in the short term. However, whether this amount also suffices for the medium- and long-term will depend on the epidemic's impact and duration, he added.
While the coalition hailed the guarantee scheme, a number of reservations were voiced by opposition parties, with Luka Mesec of the Left for instance arguing the government was primarily helping banks not companies.
Mesec moreover argued that SID Banka, the state-run export and development bank which will issue the guarantee, would in fact turn into some kind of bad bank. Finance Minister Andrej Šircelj denied this.
Many questioned the conditions and limitations applying to the loans, which will be limited to 10% of annual revenue or the yearly cost of wages.
The opposition Left, the Marjan Šarec List (LMŠ) and SocDems tried to raise the loan ceiling with amendments, arguing many companies will not be able to use the guarantees in the proposed form, but were rejected.
The bill moreover puts on hold rent payments for struggling companies that are renting premises from the state and municipalities. Some MPs argued that this should apply to privately owned business premises as well.
Meanwhile, the prime minister also pointed to the package's significance for local communities, which will get by around 6% higher funds by the state calculated on the basis of the number of inhabitants. The increase will apply retroactively from 1 January.
Janša stressed that the raise was merely securing enough funds for basic activities. "We will try to address the costs stemming from the epidemic separately," he announced.
The second stimulus package was passed in a 54:1 vote. Voting against was one Left MP, whereas the other Left MPs and the MPs of the opposition LMŠ and the SD as well as some of the Alenka Bratušek Party (SAB) abstained.
Along with the guarantee scheme, the MPs also passed upgrades to the first stimulus package by introducing milder conditions for subsidising wages for idled workers and by expanding eligibility for such measures by another 190,000 recipients to put the total number of 1.2 million. Slovenia has 2 million residents.
Initially, state-funded pay for temporarily redundant workers was available to those who estimated that their revenue would drop by 20% compared to the same period last year, but the new threshold is 10%.
The same change applies to the self-employed, who get a basic income and have their social contributions covered as part of the aid package.
Moreover, this measure will also be available to humanitarian organisations and organisations representing the disabled, as well as small companies in the insurance and finance sectors.
Also, those who were made redundant after Slovenia declared epidemic on 12 March will be eligible for EUR 513.64 gross monthly under the changes.
What is more, the changes introduce vouchers to help the tourism sector. This means that travel agencies will be able to issue vouchers to consumers who had paid for a holiday they could not take due to the pandemic.
While the changes are worth EUR 37 million, some criticism came from the opposition regarding groups that still remain unaddressed. "What about rents that tenants cannot cover because they lost income," Matjaž Han of the SocDems noted one example.
The changes to the first stimulus package were endorsed in a 52:7 vote, with seven Left MPs voting against and the MPs of the LMŠ, SD and SAB abstaining.
Finally, also passed today were changes to the law on temporary measures imposed on the judiciary during the epidemic. The changes bring a gradual easing of restrictions to restart the judicial system at the same time taking care of potential health risks. The changes were passed unanimously, with 86 votes.