Slovenia confirms €3 billion package to help overcome coronavirus

A display shows info about covid-19 in an empty area of the old town of Ljubljana, Slovenia, 16 March 2020. [Igor Kupljenik/EPA/EFE]

The Slovenian parliament on Thursday (2 April) approved measures worth about €3 billion, or 6% of GDP, to help companies and individuals overcome the coronavirus epidemic.

Slovenia, an Alpine state of 2 million people, has so far confirmed 897 cases and 16 people have died.

“This law is full of intervention decrees that no government of a socially- and market-oriented economy anywhere in the world would ever propose in a normal situation,” Prime Minister Janez Janša told parliament before Thursday’s vote.

“But now we live in a different world.”

Slovenia, which borders Italy, Austria, Hungary and Croatia, exports about 85% of its products, mostly to other EU states. Main exports include cars, car parts, pharmaceutical products and household appliances.

Under the new measures, the state will pay compensation and obligatory taxation for the national pension and health systems for businessmen and farmers hit by the virus, as well as to those who are temporarily laid off.

It will also enable businesses to postpone tax payments. It will increase wages of those who work in difficult conditions, like doctors and nurses, and reduce wages of government officials by 30% for as long as the epidemic lasts.

One-off financial help will be given to students, large families and pensioners whose monthly pension is lower than €700.

Jansa said the government was preparing further measures to ensure liquidity for companies whose business has been hurt.

Since the middle of March, Slovenia has closed all schools, bars, restaurants, hotels, shops, apart from food and drug stores, sports centres and cultural institutions and cancelled all public transport, including air traffic.

It has prohibited any socialising in public areas. Since the start of this week, people are no longer allowed to leave their municipality, except to go to work or to visit a doctor, or for some other emergency.

Several companies had to suspend production due to a lack of production parts or to reduce the spread of the virus. Among them were some of the largest exporters, like car maker Revoz, a unit of France’s Renault, and household appliance maker Gorenje, a unit of China’s Hisense.

The Bank of Slovenia said on Tuesday the economy could shrink by 6% to 16% this year, depending on the length of the epidemic, adding the announced measures could cushion the fall. Last year, GDP growth reached 2.4%.

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