Support measures for tourism sector on hold, awaiting government decision ({{contentCtrl.commentsTotal}})

The passenger terminal at Tallinn Airport.
The passenger terminal at Tallinn Airport. Source: Sander Koit/ERR

The council of the Unemployment Insurance Fund (Töötukassa), which discussed support for the tourism sector affected by the coronavirus crisis, did not make any decision on Tuesday, September 15, and measures proposed by the government are still awaited.

Whereas chairman of the unemployment fund's council and Trade Union Association leader Peep Peterson supports the restoration of wage compensation to a limited extent, Minister of Social Affairs, Tanel Kiik (Center), says that in addition to expenses, there are juridical limitations at play.

According to the Employment Contracts Act, an employee's wage can be reduced due to unforeseen reasons for up to three months. This point was important in the measure taken by the Unemployment Insurance Fund because, with those companies that applied for compensation, employee wages had to be cut by at least 30 percent. This means that if the government plans to implement the same scheme within the tourism section, there will be legal considerations.

"As of now, where the measure has been used up, it is not possible to start again with it in autumn. We have to work out legally on what bases we can reactivate the same scheme," Kiik said.

The law is not the only issue; Kiik said that implementing the scheme would also be heavy on the state budget.

"This kind of measure supporting tourism and related sectors would cost €10 million a month. The honest answer is that carrying this kind of a burden for six to seven months wouldn't be responsible," Kiik added.

The minister said that €5 million a month should be the maximum for this year, and sums for next year depend on how ongoing negotiations on the state budget pan out.

However, there is no consensus on the matter within the cabinet at present, and other ideas, ranging from vouchers to offering loans and guarantees are still under discussion.

Peep Peterson said that other measures would not not be so effective, however. In his opinion, the sector should still be given priority assistance via the unemployment fund, which he says would be better targeted and total about €20-25 million.

According to Kiik, the issue will not be broached at the regular government meeting this Thursday.

Tourism and related sectors were, and continue to be, among the hardest hit economic areas as borders closed at the peak of the pandemic, and travel and other restrictions continue to be applied.

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Editor: Roberta Vaino, Andrew Whyte

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