Support appears insufficient

Many companies say the state package against the coronavirus impact has passed them by

Thousands of corporations have run into trouble as they find out they are not included in the support measures announced by the Finance Ministry even though they meet the criteria required, having been forced to suspend their operations.

The use of activity code numbers (KAD) appears to be rather problematic and has led to a series of complaints by professional entities, as they ask not to be left out of state support. Even the supplementary list of activity sectors published yesterday appears to be insufficient, with gaps in many KAD leaving some enterprises without support.

For instance, a company in Thessaloniki that produces cookies for cafes has the same KAD as some food industry giants. That small company has been forced to suspend its operations as cafes have shut their doors. Its turnover is near zero but it appears it will not be included in the support package, leaving its workers without payment.

The ministry is recommending patience until next week, when much of the country’s economic activity will be included in the support package – i.e. about 900,000 enterprises. The question for enterprises outside the state umbrella is whether their employees will get to receive the extraordinary compensation for March and April and whether their tax obligations will be suspended.

Meanwhile, the suspension of tranche payments for the loans of corporations hurt by the pandemic is proceeding with problems as the freeze is not automatic; rather, it requires that each corporation submits an application. This has led to the phenomenon of banks charging the accounts of their client-corporations the monthly tranche of their loan payment if the companies have not filed an application, even though many of them have ceased operations in response to government orders.

Bank officials explain that the suspension of tranche payments by corporations, announced by the Hellenic Bank Association, exclusively concerns the firms that have been paying their obligations to date. Certain lenders have started the suspension with an emphasis mainly on smaller enterprises.