Government approves new COVID-19 business support package

Stenbock House, seat of the government.
Stenbock House, seat of the government. Source: Siim Lõvi /ERR

The government gave the go-ahead to support measures worth €30 million for businesses hit by the autumn-winter wave of COVID-19 and the ensuing restrictions. The funds are subject to European Commission approval and should be ready in the first quarter of next year.

The bulk of the support is aimed at businesses in Harju and Ida-Viru counties, the worst-hit regions of the country in the current coronavirus wave and the areas with the most stringent restrictions.

Prime Minister Jüri Ratas (Center) said: "This year has been unpredictably difficult for the entire world. In Estonia, the people and businesses of Harju and Ida-Viru counties have suffered particularly heavy blows during the second wave of the coronavirus. To prevent the risk of the health care system collapsing, the government had to introduce extensive restrictions in these counties."

Mainly aimed at wage support for entertainment, hospitality, leisure and culture sectors in Tallinn, Harju and Ida-Viru counties

Ratas noted the support will be aimed mainly at the tourism and hospitality sectors, as well as the cultural and leisure sectors, which have been effectively locked down in Harju County since December 28 and in Ida-Viru County for considerably longer.

Ratas said: "Unfortunately, the lives of thousands of people have been severely disrupted as a result of these restrictions. In order to provide compensation from the state for loss of income, the government approved over €30 million-worth of support measures today. These measures are targeted at workers in tourism, accommodation, catering, but also culture, sport and education. We've also earmarked in this sum support for self-employed persons operating in these areas."

Ratas said that this and the arrival of the coronavirus vaccine in Estonia less than a week ago will help to stabilize the situation and allow a return to normal life.

The government itself is to allocate €5 million from its reserve to the Ministry of Economic Affairs and Communications in funding the measure. 

European Commission approval required

€16 million will be channeled via the Unemployment Insurance Fund (Töötukassa) to provide wage support for employers whose businesses have been significantly disrupted by the restrictions.

This support covers the period December 28-January 17, and differs from the wage support scheme provided in the summer in that it covers all wages, rather than a proportion (70 percent in the case of the summer package – ed.). Conditions include a requirement for employers not to make any lay-offs during that time.

Enterprise Estonia (EAS) will initiate the support measure in the first quarter of 2021; European Commission state aid authorization is also required.

The rest of the support package breaks down as follows:

  •  Unused funds from retail and service entrepreneurs' rent support from the spring COVID-19 wave totaling €3 million is earmarked for supporting tourism companies, along with a further €1.9 million that went unused in the sector during the spring COVID-19 wave.
  • €3.7 million is allocated from the government's reserve to the Ministry of Culture for supporting cultural enterprises in Harju and Ida-Viru counties. The conditions of the aid package are similar to the spring crisis package for the sector, though are still to be finalized in January.
  • Organizers of cultural events as well as businesses and organizations in culture and sports can also apply for their labor costs to be compensated via the Unemployment Insurance Fund.
  • €153,000 is to be allocated from the government's reserve to the Ministry of Culture for compensating damages in the area of culture and sports caused by the restrictions extended until January 10 elsewhere in Estonia, i.e. outside Harju and Ida-Viru counties. Applications will be processed by the Ministry of Culture, Folk Culture Center, the Integration Foundation and the Estonian Foundation of Sport Education and Information.
  • €813,512 will be allocated from the government's reserve to the Ministry of Social Affairs for supporting self-employed persons in Harju and Ida-Viru counties whose activities have been significantly disrupted due to the extensive restrictions imposed by the government.
  • €10 million will go to tourism, more specifically restaurants, handicraft and souvenir shops operating in Tallinn Old Town as well as accommodation enterprises and travel companies.
  • €3 million was allocated from the government's reserve to the Ministry of Education and Research for supporting providers of private youth hobby education and activities in Harju and Ida-Viru Counties. Entrepreneurs in education and the field of youth will also be able to apply to have their labor costs compensated via the Unemployment Insurance Fund for the period from December 28 to January 17.
  • €441,000 will be allocated from the government's reserve to the Ministry of Education and Research for compensating damages caused by the restrictions to providers of private hobby education and activities elsewhere in Estonia.

Labor cost compensation has been capped at €180,000 per employer. A further condition is that a company or applicant must have no extant, non-deferred tax debt.

Applications can be made online, BNS reports.


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Editor: Andrew Whyte

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