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Government adopts the third anti-corona package

At a press conference on the current situation with respect to the COVID-19 epidemic, the Deputy Prime Minister and Minister of Economic Development and Technology, Zdravko Počivalšek, and the Minister of Labour, Family, Social Affairs and Equal Opportunities, Janez Cigler Kralj, and the Minister of Finance, Andrej Šircelj, presented the third package of measures to mitigate the consequences of the epidemic.

Minister Janez Cigler Kralj

Minister Janez Cigler Kralj | Author Nebojša Tejić

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It follows the Government’s regular session yesterday, where it concluded discussions on the proposed law determining intervention measures to mitigate and eliminate the consequences of the COVID-19 epidemic for citizens and the economy (#PKP3). This draft law introduces provisional measures in the areas of labour, public finance, the economy, agriculture, forestry and food, scholarships, subsidised student meals, higher education, infrastructure, and public procurement.

European Commission provides assistance to EU Member States

Finance Minister Andrej Šircelj presented the EU’s solidarity instrument SURE, which will provide the Member States with a total of EUR 100 billion in loans to support national short-time work schemes and similar measures needed to mitigate the consequences of the coronavirus epidemic. The European Commission can acquire these funds under more favourable conditions than Slovenia would have been able to. The Finance Ministry estimates that Slovenia will borrow around EUR 900 million from this fund.

The Slovenian economy was in dire need of such measure but it could only be introduced if supported by all the Member States, added Mr Šircelj. This is also one of the reasons why the Government proposed a fast-track procedure for the adoption of this law. Furthermore, it also proposed that the National Assembly should adopt a decision to the effect that a referendum on the proposed law cannot be called.

Subsidised working time replaces subsidised temporary lay-off

According to the Minister of Labour, Mr Cigler Kralj, one of the key measures of this third anti-corona package is subsidised short-time work, which Slovenia is introducing as the 17th Member State. With this measure the Government aims to encourage businesses to restart their production processes and thus help flatten the unemployment curve.

A significant increase in registered unemployment was observed by the end of April; in May, however, this trend has slowed down. A total of 14,419 more persons were unemployed by the end of April compared to the same period last year. Mr Cigler Kralj estimates that with the first and second anti-corona package the Government preserved 260,000 jobs and provided assistance to 1.3 million inhabitants.

The Labour Ministry will subsidise up to 50% of working time, i.e. a maximum 20 hours a week. For the time when a worker will not work, their employer will pay them an allowance of 80% of their wages and subsequently be subsidised by the state. Employers who cannot provide at least 10% of their employees with 90% of normal working time, i.e. 36 hours of work per week, will meet the basic qualifying condition for the subsidy. Employers can apply this measure every month in the period from 1 June to 31 December 2020.

The Minister went on to say that from 25 May onwards, old people’s homes will admit new residents.

Measures to assist tourism and the economy

The Minister of Economic Development and Technology, Zdravko Počivalšek, presented two key measures for the tourism and hospitality industry. The first is compensation for temporary lay-offs for companies in the tourism and hospitality industry whose revenue, in their estimation, will decrease by more than 10% compared to 2019. These include hotels, holiday homes, recreational vehicle parks, restaurants, travel agencies, organisers of exhibitions and fairs, operators of arts facilities, casinos and tourist transport. Employers must lay off the workers by 30 June, while a worker can return to work for 7 days during this period.

The second measure comprises vouchers which are to be granted to all Slovenian citizens. Those over 18 years of age will receive vouchers in the amount of EUR 200 while those younger in the amount of EUR 50. The vouchers can be redeemed until 31 December 2020 for overnight stays with breakfast provided by hotels, holiday homes, campsites, tourist farms and all other similar short stay accommodation facilities. The vouchers will be in electronic form and the person using the voucher will have to provide their tax identification number upon redemption. Within 8 days, the Financial Administration of the Republic of Slovenia (FURS) will reimburse the service provider for the amount. The amount of state aid through tourism vouchers is estimated to be EUR 345 million, while the multiplier effects, i.e. for the additional use of services, are estimated to be EUR 172 million.

As highlighted by Minister Počivalšek, the Ministry was also active in providing liquidity to companies. The Slovene Enterprise Fund and the Slovenian Regional Development Fund will enable soft and quick loans. Funds have been guaranteed as follows: EUR 10 million for the Slovene Enterprise Fund and EUR 14.4 million for the Slovenian Regional Development Fund. The loans will be in amounts from EUR 5,000 to EUR 50,000. The Government will thus provide support to approximately 900 companies in tourism and other industries.

The Minister then presented the measure for investments. The Government is introducing a relaxation of the conditions for the allocation of incentives regarding new jobs until 30 June 2021. The incentives will be granted if the investment creates, no later than three years after its completion, at least ten work positions in the manufacturing or service sector, or at least three work positions in research and development. An additional condition for investments is that the investment in manufacturing should not be lower than EUR 12 million, EUR 3 million in the service sector, and EUR 2 million in research and development.

The Government introduces an FDI transparency mechanism

Foreign direct investment is investment by a foreign investor with a view to establishing or maintaining lasting and direct links between the foreign investor and the entity established in Slovenia, and to acquiring at least 10 percent of the equity or voting rights therein. The foreign investor must notify the Ministry of Economic Development and Technology of such investment no later than 15 days after the conclusion of the merger contract or the announcement of the takeover bid. A contact point for investment notification, overview and annual reporting to the European Commission will be established. An investment overview procedure has also been defined. The proposed law also defines the conditions under which an investment can be prohibited or cancelled if it is established that it poses a threat to security or public order in Slovenia.