Luxembourg's Ministry of Finance, together with the General Directorate for Small and Medium-Sized Enterprises in the Ministry of Economy, has announced that support measures for businesses affected by the COVID-19 pandemic are being strengthened.
On Friday 20 November 2020, the Luxembourg government approved a bill which provides for the establishment of new financial assistance for companies in the sectors which are most seriously affected by the COVID-19 pandemic and whose financial situation makes it difficult to bear the new burden resulting from the increase in the minimum social salary scheduled for 1 January 2021.
This assistance takes the form of a single lump sum capital grant of up to €500 per employee, whose monthly remuneration is greater than or equal to the minimum social wage and less than or equal to the qualified minimum social wage (SSM). Compensation assistance takes into account employees who were hired before 31 December 2020 and who will have been in employment during a monthly period between 1 January 2021 and 30 June 2021. This assistance is intended for sectors most affected by the health crisis, namely tourism, events, culture, hospitality, entertainment, retail trade as well as managers of continuous vocational training organisations.
The Minister for Small and Medium-Sized Enterprises, Lex Delles, stressed that “the government has instituted and continues to develop measures to support employment and businesses in the context of the COVID-19 pandemic. More support is needed for companies in the sectors most affected in this difficult period. By constantly adapting its support measures, the Directorate-General for Small and Medium-Sized Enterprises encourages employment and promotes a lasting revival of the Luxembourg economy”.
At the same time, the government has decided to strengthen the strike force of the Office du Ducroire (ODL), the public credit insurer of the Grand Duchy, which offers financing guarantees to companies located in Luxembourg that export world-wide. The state will increase the capital of the ODL by €20 million to allow better export credit insurance, both qualitative and quantitative.
Finally, the government has expressed its willingness to strengthen its support for the surety of the mutual fund of the Chamber of Commerce and the SME mutuality fund of the Chamber of Trades, if necessary, through the National Credit and Investment Company (SNCI).
Pierre Gramegna, Minister of Finance, commented “Thanks to this injection of funds, the ODL will be able to increase its guarantee capacity by €400 million, which will promote the conquest of new markets in this period of global recession. Additional financial resources intended for mutual funds in high demand during this period of economic slowdown will also be necessary to support businesses in the post-COVID-19 recovery phase.”