Crisis measures to support the economy can also be used next year

Stenbock House, 8 December 2020 – At today’s cabinet meeting, the members of the Government decided that the crisis measures directed at KredEx, the Estonian Rural Development Foundation, and tourism sector will continue to be implemented in the coming year.

According to Prime Minister Jüri Ratas, the state has to support the economy in difficult times. ‘We support an economy that has been hammered by the crisis. The least we can do is ensure that critical resources for rapid economic recovery are available after the crisis,’ he emphasised. ‘When making decisions in today’s difficult situation, we need to think about the future.’

KredEx

The cabinet meeting of the Government approved in principle the continuation of the implementation of the KredEx measures. The proposal of the Minister of Entrepreneurship and Information Technology Raul Siem to increase the limit of the credit loss indemnity in case of the emergency crisis measure of KredEx from 30% to 50% in guaranteeing new loans granted by banks was supported.

‘Although the economic downturn turned out to be less severe than expected since the beginning of the crisis, the new outbreak of the coronavirus will postpone the economic recovery, maintaining the need of entrepreneurs to survive the crisis with state support. Therefore, we proposed to the Government to transfer the funds remaining from the supplementary budget allocated to KredEx this year to the next year,’ Minister of Entrepreneurship and Information Technology Raul Siem said.

In order to direct companies to invest more, it is planned to abolish the budgetary allocations of direct loans at KredEx and to merge the budget for working capital and investment loans.

‘In spring, we divided the business loan budget of KredEx in a way that 500 million euros were allocated to working capital loans and 50 million euros to investment loans. As the crisis has deepened, we also need to increase flexibility, and we have decided to remove these limits in the direct loan budget of KredEx,’ Minister Siem said. ‘We will use the remaining funds with a common budget, which will help increase the volume of the investment loans at KredEx and contribute to the fact that new business ideas of companies can be realised as soon as possible and have a better starting point in growing competition,’ he added.

Estonian Rural Development Foundation

In 2021, loan guarantees, working capital and investment loans, and support measures for the financial lease of agricultural land will continue to be implemented.

‘Existing crisis measures of the Estonian Rural Development Foundation have been of great help to businesses, but the crisis is far from over and the business sector has a lot of uncertainty about the future. In order to cope with and better overcome the crisis, it is important to continue to implement the developed crisis measures after 31 December 2020,’ Minister of Rural Affairs Arvo Aller said.

There has been a great deal of interest in the COVID measures of the Estonian Rural Development Foundation, indicating that in times of crisis, it is important to support businesses both in solving liquidity problems and in realising investments that would help them adapt to the new situation and better prepare for any crises in the future. As of the beginning of December, loan decisions in the amount of 79 million euros, guarantee decisions in the amount of 29 million euros, and financial lease decisions in the amount of 2.6 million euros have been made.

Enterprise Estonia

The Government approved in principle the enabling of the use of 5 million euros allocated from the Government’s reserve on 10 November to support the tourism sector next year.  This amount will be accompanied by the balance of the crisis support for lease payments of trade and service companies of Enterprise Estonia in the amount of 3 million euros.

According to Minister of Entrepreneurship and Information Technology Raul Siem, the aim of crisis measures for the tourism sector is to support the most severely affected accommodation companies, catering companies in the Old Town of Tallinn, travel companies, and handicraft shops all over Estonia. ‘With the new crisis measures, we help tourism entrepreneurs whose business activities are most dependent on foreign tourists and who are relevant service providers in the recovery of foreign tourism,’ Siem said.

Enterprise Estonia can provide support in 2021.

The content and conditions of support covering all crisis measures will be decided in the near future.


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