Members of the government approved the crisis measures related to the COVID-19 supplementary budget

24.04.2020 | 00:00

News

Tallinn, Stenbock House, 24 April 2020 – At today’s cabinet meeting, the members of the government approved the measures related to the state supplementary budget for 2020. The principles of the distribution of funds provided for in the supplementary budget, the target groups, the scope of measures, and more general procedures were discussed.

The implementation of the approved support measures requires the adoption of sectoral ministerial regulations, which specify the organisation of the distribution of funds. In accordance with the Act on the State’s Supplementary Budget for 2020, ministerial regulations must be approved by the government at the government meeting scheduled for Monday.

“Today, we once again discussed the distribution of funds provided for in the supplementary budget very thoroughly and by sectors, so that the crisis money would be targeted and implemented in the best possible way and reach those in need as soon as possible,” said Prime Minister Jüri Ratas. “The government-backed measures aim to alleviate the economic shock and support our workers, businesses, and economic sectors in all areas of business, regardless of their size. The state’s crisis measures are aimed at getting us out of the current recession with as little damage and as quickly as possible.”

The members of the government approved in principle:


SUPPORT FOR EDUCATION AND YOUTH


The aim is to support private general education schools, private youth work, and hobby education, private kindergartens, and private childcare in the field of education and youth. In addition, support is provided for environmental education centres.

Target group: private child care institutions and schools, hobby schools, and private education providers; environmental education centres.

Total amount: 15 million euros and an additional 150,000 euros for environmental education centres.


SUPPORT FOR CULTURE AND SPORT

The aim is, in the interests of the sustainability of sectoral organisations, to partially compensate for the costs already incurred and the unavoidable fixed costs resulting from the events that have been cancelled and the disruption of the organisations’ activities.

Target group: public, municipal, and private institutions and organisations in the field of culture and sports, such as creative unions, theatres, museums, and institutions organising exhibitions. In addition, people who are professionally engaged in culture, creation, and sports, such as freelance artists, instructors of song and dance festival groups, coaches, etc.

Total amount of support: 25 million euros.


SUPPORT FOR THE RURAL ECONOMIC SECTOR

The aim is to alleviate the unexpected liquidity shortage of rural businesses through loans and loan guarantees. The financial lease of agricultural land is intended to improve the farmers’ access to additional funding, and this measure will continue after the crisis.

The budget for the agricultural producer replacement aid will be increased by 0.5 million euros to ensure that not only stock farmers but also plant breeders are provided with a replacement service due to the absence of work as a result of the COVID-19 crisis. The aim is to ensure the continuation of food production and thus, the security of food supply in Estonia.

Target group: organic and rural economic companies depending on the measures. For example: primary agricultural producers, processors and/or distributors of agricultural products; entrepreneurs engaged in fisheries, the food industry, and rural economy (including accommodation and catering, i.e. rural tourism); savings and loan associations belonging to the Estonian Union of Credit Cooperatives; and foundations and non-profit associations in these fields. The agricultural producer replacement aid is aimed at stock farmers and plant breeders.

Total amount of support measures: 200.5 million euros.


ECONOMIC MEASURES

The package of support measures for the companies most affected by the crisis:

The aim is to support entrepreneurs and micro and small enterprises in the tourism sector to alleviate their economic difficulties and increase their ability to exit the crisis more quickly.

The total amount of support is 35 million euros, which will be implemented through Enterprise Estonia. The support amounts are distributed as follows:

• 25 million euros for accommodation, catering, and travel companies, tourist attractions, and tourism service providers offering experience services to visitors in nature tourism or cultural tourism or active leisure services.

• 10 million euros for micro and small enterprises which need state support to restructure their business in accordance with the effects of the crisis and to realise the new opportunities arising from the crisis.


Measures in the field of housing:

The aim is to alleviate the impact of the crisis on the construction sector so that the situation on the construction market can begin to stabilise. The construction sector is an important economic driver with high employment that also helps other sectors out of the downturn, which is why work on construction sites must recover as soon as possible.

Target group: The direct target group is apartment associations, small house owners, and local governments, through whose orders money goes to construction companies, construction consulting companies, logistics companies, construction material manufacturers, and other companies related to construction.

The total amount of the measure is 105 million euros, which will be implemented through the KredEx Foundation. The amount is distributed as follows:

• 73 million euros for the reconstruction of apartment buildings and small houses
• 22 million euros for the regional loan for the reconstruction of apartment buildings
• 5 million euros for demolition
• 5 million euros to provide housing surety.


COVID-19 support measure for the acquisition of state ownership:

The aim is to provide support to companies that have suffered economic damage by providing the additional capital needed to exit the crisis and enabling companies to buy back their holdings later.

Target group: companies with a significant economic impact on the state and the exporters paying the highest labour taxes.

Total amount of the measure: the support is implemented by KredEx’s subsidiary SmartCap and the amount allocated is 300 million euros. The government decides on the beneficiary on a case-by-case basis.

In addition, business loans and loan sureties from Kredex are provided to stimulate the economy.


Last mile:

The aim is to support telecommunications companies in building a sustainable communications network. The measure also provides support for the end user for high-speed internet access.

Target group: support is given to a company that builds and later operates an access network to be built in an area that currently has no high-speed internet and would otherwise not have high-speed internet in the next three years. End-user support is provided to companies or people who join the new infrastructure.

Total amount of the measure: 15 million euros.

The ministerial regulation to implement the measure is planned for June.


SUPPORT FOR LOCAL GOVERNMENTS

Support for stabilisation of the income base of local governments:

The aim is to compensate local governments for the revenue lost as a result of the crisis and to reimburse extraordinary expenses. For example, the income of local governments from income tax has decreased, as well as the payment of place fees for kindergartens, and so on. At the same time, the costs of purchasing disinfectants and personal protective equipment have increased, as well as social costs.

The amount of the support is 30 million euros.

Investment support for local governments

The aim is to stimulate recession through investment. The local government may use the support funds for new investments, repair costs, demolition costs, and related costs.

Amount of the support: 70 million euros.

Local road maintenance support

The aim is to mitigate the effects of the recession and repair local roads.

Amount of the support: 30 million euros.


SUPPORT FOR RELIGIOUS ASSOCIATIONS

The aim is to support religious associations that have been severely disrupted during the crisis, but which continue to provide people with both spiritual and social assistance. Due to the limitations of the emergency situation, the activities of religious associations and earning an income are significantly limited. At the same time, more and more people need help from churches.

Target group: religious associations.

Amount of the support: 2 million euros.

Government Communication Unit

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