State to guarantee up to 80% for loans to SMEs, 70% for large companies

Parts of the corrections to the first package and of the second package were presented on Wednesday by the head of the advisory task force Matej Lahovnik, who said that in the second package, the government "aims for quick liquidity aid to the economy."

Pointing to the loan guarantees, he said that the amount was limited to 10% of annual revenue or total wage bill, with an additional condition being that the company must participate in the settlement of claims.

"By doing so, they assume a large part of the risk. We count that commercial banks will provide fast and effective liquidity aid," Lahovnik said, adding that the government would create a guarantee scheme modelled after Germany.

Economist Igor Masten, a member of the advisory task force, said it would be up to banks to decide which companies could get a liquidity loan. He added that the volume of the scheme was EUR 2 billion for now, and that it could be increased in the coming months depending on the needs.

Finance Minister Andrej Šircelj said that guarantees would not cover loans intended for financing of affiliated companies or companies with headquarters abroad or in tax havens.

Companies who apply for loans need to have a good financial standing as at 31 December, a good credit rating and no outstanding liabilities related to taxes and social security contributions, he added.

Masten added that banks would get guarantees for loans issued between 12 March and 31 December this year, and liquidity loans could be granted for a five-year period to replace any form of financing.

"We dont't want that the shortage of financing resources becomes an obstacle for companies getting back into supply processes and production of goods for the market," he said.

As for the adjustments of the first package, Lahovnik said that the criteria for subsidies for wages and social security contributions for workers on temporary lay-off had been relaxed and the scope of beneficiaries expanded.

The scheme will apply for companies whose annual turnover was down by 10% compared to the pre-crisis period, and will also cover micro companies in insurance and humanitarian organisations or organisations for disabled persons, even if they do not meet the criteria.

All employers who apply for this aid may recall a worker for seven days of their choice in one month.

Lahovnik noted that potential beneficiaries should be aware that the fiscal space was not unlimited and that this was state aid to the economy financed by taxpayers, which would have to be refunded at some point in the future.

"The aid is intended for companies who have found themselves in trouble due to the crisis, and is not aid intended for those who had been in trouble earlier," he stressed.

The advisory task force also recommends that production and services be relaunched as soon as possible while sticking to the health protection protocols.

Lahovnik notes that Germany, for instance, was putting an emphasis on work from home, time corridors, same workers working in same shifts, safety distance and use of protective equipment. "Slovenia will have to implement these measures."

He also proposed subsidies for shortened working time under the German and Austrian model, noting that funds at the EU level were also available for such a measure.

Lahovnik believes that it will be possible to restart the economy to achieve its pre-crisis capacity before 1 June.