Economy & Politics

The State promises 800 million euros in new aid

Prolonged partial unemployment, stimulus and solidarity fund for sectors still at a standstill, doubled cost of living allowance, tax incentive to lower rents: the government presented, on Wednesday, new measures to support both companies and individuals.

Prolonged partial unemployment, stimulus and solidarity fund for sectors still at a standstill, doubled cost of living allowance, tax incentive to lower rents: the government presented, on Wednesday, new measures to support both companies and individuals.

After the 8.8 billion euro stabilization pact announced at the end of March, Xavier Bettel released a new package of measures on Wednesday. Just two months after the first decisions to support the economy, the Prime Minister believes that the country is now on the verge of “a new start”. A formula that the head of government has translated into figures (from 700 to 800 million euros in new aid) but above all in concrete actions.

The best example of this is the announcement made at the end of the government council on May 20: the cost of living allowance will be doubled for all of its beneficiaries. And this, a priori, until the end of the year. “Because it is important to support those who are already struggling to make ends meet,” said a Prime Minister with a social accent probably determined, in part, by his recent meetings with the unions.

The effort of anti-crisis measures in relation to the wealth produced in the Grand Duchy is significant. It should reach almost 19% of national GDP. A ratio that ranks the country among the five states most committed to supporting its economy in relation to its economic capacity.

This is how a number of measures put forward today echo the demands expressed sometimes by employee representatives, sometimes by the Chamber of Employees and, more discreetly, by employers’ organizations and professional federations. This is so with the announcement of the extension of partial unemployment measures beyond the state of crisis. From July 1, the system will be renewed for companies that are slow to fully resume their activity.

A stimulus and solidarity fund is also born, at a time when unemployment figures announce 20,253 job seekers in the country. The precise amount of this fund has not been mentioned, but its target is precisely set. The specific aids will concern “the tourism, events, hotel and catering sectors (bar included), fitness rooms and all activities which had to remain closed since mid-March and which are still closed”.

The government promises them six months of assistance. And what is true for these companies will be true for their employees. The Prime Minister committing to their payment € 1,250. Per month or in total, the precision was not given. A boost from the state also awaits shops (up to 250 employees), depending on their size.

Ministers Gramegna (Finance), Fayot (Economy) and Delles are expected to provide details of these measures on Friday, May 22 during a joint press conference. Opportunity for them to also certainly return to the four-month extension offered to businesses for the reimbursement of public advancess granted so far.

The State also wished to offer an incentive for private owners to grant discounts or cancellations in the rent charged to businesses. If this is the case, they will benefit from a tax deduction of double the amount of the rebate granted. Up to a maximum ceiling of 15,000 euros. For its part, the donor state, it undertakes not to increase its rents for private individuals.

To respond to the consequences of the covid-19 crisis, the Ministry of Housing said on Thursday not only that eviction procedures had been suspended for the duration of the state of crisis, but also that the aid granted to low-income households revenue has been revalued.

And as if that were not enough, Xavier Bettel adds the extension of the delays for the granting of student grants; the introduction into the law of family support leave (for all those who had to stop to keep a loved one previously taken care of in a closed reception structure) or the increase in subsidies to encourage Luxembourgers to switch to soft or electric mobility or to embark on work to improve energy efficiency of their accommodation.

To see if all this, all the same, will not require a new recourse to the loan. Something the Prime Minister did not mention.

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