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Slovenian government adopts new stimulus package

Last week, the Slovenian government adopted a new stimulus package to mitigate the impact of the coronavirus crisis on the economy. The measures will be in place until 31 May 2020. For companies, the new package includes entire pay compensation for temporary layoffs (80% of the salary), tax and loan payment deferrals, loan guarantees and financing of social contributions.

The self-employed will be eligible for temporary basic income, while pensioners, large families and students will get allowances. In addition, for two months the government will cover all social contributions for workers who continue working. The total amount of loan guarantees to be provided to companies affected by the crisis is EUR 200m.

The temporary basic income measure provides the self-employed with EUR 350 for March if they prove at least a 25% drop in their income over February and EUR 700 in April and May if their income is down at least 50%. The state will also cover all of their social contributions. The students will get a one-off allowance of EUR 150, while families with three children will get an additional one-off allowance of EUR 100 and those with four or more EUR 200. Pensioners getting less than EUR 700 per month will get a one-off bonus between EUR 130 and EUR 300, while those on welfare will get an extra EUR 150.

Pay bonuses of up to EUR 200 are also planned for workers in the private sector who are disproportionately exposed and are working overtime during the epidemic. The funds will, however, be provided by employers, who will in turn be exempt from payments for pension contributions. Sick pay for those who fall ill during the crisis will be fully covered by the public health insurance rather than employers having to cover the first 30 working days of absence. Unemployment benefits will automatically kick in on the first day of unemployment.

The package also includes a special set of measures for agriculture sector, including the three-month temporary basic income aid for farmers. Farmers who fall ill due to coronavirus will, in addition, be eligible for financial aid, direct transfers and cancelled contributions. The measures also include a 30% pay cut for holders of public office and a 30% cut in fees for members of supervisory boards in state-owned companies.

The government is also preparing a second and a third  stimulus packages, with the former primarily aiming to address the issue of liquidity in the Slovenian economy, and the latter package dealing with the legislature that will have to determine an exit strategy for the period after the epidemic is over.

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