Neivelt: Crisis offering people new opportunities

Indrek Neivelt.
Indrek Neivelt. Source: ERR

The crisis brought on by the coronavirus pandemic has been a difficult time, however people also have many new opportunities, businessman Indrek Neivelt said, adding that instead of support, the state should simplify offering loans, and that some businesses have been given support too generously.

In an appearance on ETV's "Esimene stuudio" on Thursday night, Neivelt warned that the economy would continue going downhill for some time yet.

"The question is, how will this continue developing if right now we open up our borders and open everything up?" he asked. "In this case it's only a question of when a new wave will arrive."

According to Neivelt, the crisis brought on by the coronavirus has been a difficult time, but people have also been given many new opportunities as well. New supply chains have been established due to the crisis, companies are moving production to Europe, and many new IT solutions are cropping up, in connection with which Estonia also has major opportunities.

Commenting on the government's crisis measures, Neivelt said that the state was somewhat too generous in handing out support to companies whose turnover did drop but that would have nonetheless survived the crisis.

"Perhaps some companies really shouldn't have gotten [support]," he said. "They are getting stricter now, which in that sense is right."

Businesses in the tourism sector want support measures to continue at least through the end of the year, but Neivelt believes that there's no point in maintaining them for very long. He noted that new companies and new directions are appearing on the market, and added that in some sectors, it may have been wiser to lay employees off right away rather than seek support for months on end.

He believes that companies should be given low-interest loans instead, and support should go to individuals. He said that many companies seek support instead of loans, and that the state also can't bear to give loans, but will easily give support even to those who may not need it.

The biggest problem facing individuals is when incomes disappear but they still have loan payments to make. Neivelt suggested that the state should buy a portfolio of consumer loans taken out by people who have lost their jobs, noting that inerest rates on consumer loans are two to three times higher than they should be.

"That is a major burden on people; that is where people should be supported," he added.

According to the businessman, however, Isamaa's suggestion of the state giving loans to people is not a good idea. "This should not be treated with a loan; this would not end well, and this shouldn't be recommended to anyone," he said.

He said that the Kredex measures offered by the state have not begun to work by now.

"These Kredex measures don't actually work; this is also illustrated by how many of them have been issued," he commented, noting that banks won't accept the conditions Kredex wants.

He believes that when it comes to Kredex sureties, it should be clearer that these are Kredex's risks and guarantees. He also said that Kredex should have greater lending competences, including dedicated employees on the payroll for handling this. He also condemned the personal sureties demanded of business-owners, claiming that this requirement isn't even ethical.

Neivelt believes that interest rates will remain low for a long time, as states will otherwise be unable to service increasing debt burdens accompanying the crisis.

"Interest rates will remain at zero or negative for a very, very long time; there are no other options," he said.


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Editor: Aili Vahtla

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