Europe Slovenia to guarantee loans to companies hit by coronavirus

Slovenia to guarantee loans to companies hit by coronavirus

Slovenia will offer state guarantees of up to 2 billion euros (1.76 billion pounds) for loans to companies hit by the coronavirus epidemic, finance minister Andrej Sircelj said on Wednesday.

This follows measures the government introduced earlier in April which provided financial aid of about 3 billion euros to citizens and companies hit by the crisis.

The latest action for up to 2 billion euros represents about 4% of Slovenia’s GDP, based on Reuters calculations.

Sircelj said Slovenia’s public debt would increase this year from 66.1% of GDP in 2019, but did not go into further details.

Slovenia has so far confirmed 1353 coronavirus cases, 79 people have died.

Under the loan guarantee plan, the state will guarantee loans with a maturity of up to 5-years taken out by coronavirus-hit companies up to the end of 2020. It will guarantee up to 80% of the whole value of the loan.

“The aim is to ensure additional liquidity to the economy … prevent further damage and retain jobs,” Sircelj said.

“We have stable public finances and a liquid financial system and we will ensure that in the future, as well,” he also said.

Slovenia in the middle of March closed all schools, bars, restaurants, hotels, shops – apart from food and drug stores – cancelled public transport and prohibited all socialising in public spaces.

A number of companies had to suspend production due to lack of parts, lower demand for products or to try to reduce the spread of the virus.

From Monday, the government lifted some restrictions, allowing shops that sell construction materials, cars, bicycles and furniture to open as well as car service centres. More restrictions are due to be lifted on May 4.

The Bank of Slovenia said last month GDP could fall by between 6% to 16% this year due to the coronavirus lockdown after it expanded by 2.4% in 2019.

The statistics office reported earlier on Wednesday that consumer confidence in the country fell to an all-time low in April as consumer pessimism regarding unemployment and economy increased strongly due to the epidemic.

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