The three scenarios of the government for the repayable advance

The further haircut up to zero debts from the repayable advances plans the financial staff with the government determined to facilitate businesses mainly affected by the health and energy crisis. According to reports the government is considering various scenarios which it is even discussing with the institutions and the EU.

It is noted that the improved EU framework stipulates that measures can be converted into other forms of aid, such as grants. That is, the temporary framework for taking state aid measures to support the economy during the current outbreak of COVID-19 stipulates that the government can “donate” the funds to businesses and professionals if it so wishes. In essence 8.3 billion euros of the 7 cycles of the repayable advance can be made non-repayable in their entirety.

The scenarios

1. Give the full refundable deposit to all catering businesses. Also, this scenario envisages the reduction of the amounts that the other companies have to return. This means that the amount to be reimbursed from around 3 billion euros will be reduced to 1.5 billion euros and possibly lower levels.

2. No company out of about 700,000 will repay a single euro of the 8.3 billion euro loan. As we move towards the elections, this scenario will receive more and more support from the Maximos Palace. Although businesses still have access to the banking system from the more than 40 billion euros allocated by the government to help the economy, they will still be wasted on paying taxes and insurance premiums but mainly on tackling energy crisis. What the government seems to be ignoring or otherwise taking too long to take into account is that the problem of the energy crisis is not limited to supermarkets and bills. The problem must be tackled holistically by reaching the beginning of the chain and the raw materials produced.

3. The third scenario envisages both the reduction of the amounts to be reimbursed and the postponement of the repayment start time of the repayable advance.

In addition to the possibility of providing the framework for zero repayment, it enables the government to proceed with new repayable advances in 2022, something that does not seem to be discussed by the government with a high-ranking executive to answer a relevant question that it is a theoretical discussion pointing out that decisions are made based on the needs presented.

In particular, as is the case with the Sixth Amendment to the Provisional Framework, “Member States may consider modifying existing aid measures adopted by the Commission under the Provisional Framework in order to extend their period of application until 30 June 2022. make it possible to restructure or convert certain instruments by 30 June 2023, introduce new measures to support investments towards sustainable recovery by 31 December 2022 or new measures to support solvency by 31 December 2023.

Member States may also consider increasing the budget of existing measures adopted in the light of Section 3.12 or introducing other amendments to align these measures with the provisional framework as amended by this Communication. This may also include a specific adaptation of new or existing aid schemes in sectors particularly affected by the crisis in specific Member States within the limits of the amended framework. ”

What is valid today

The amount that will be repaid from all 7 cycles of state loans is estimated at about 3 billion euros, while there is a case for the discount to reach 78.75% (in the case of a lump sum payment) of the loan they received under conditions. Particularly:

– A quarter (25%) is returned if they have a drop in gross income in 2020 compared to 2019 over 70% and record losses before taxes.

– One third (33.3%) is returned if they have a drop in gross income in 2020 compared to 2019 between 30% and 70% and record losses before taxes.

– For other companies 50% is refunded.

– For new companies that have started operations after January 1, 2019 or had zero gross income in 2019:

– The fourth (25%) is returned if they have a drop in gross income in 2020 compared to 2019 (if they had recorded positive gross income in 2019) over 30% and record losses before taxes.

– For other companies one third is returned (33.3%).

1. Businesses that have a turnover drop of more than 70% and record losses before taxes will have to repay 25% of the government loan. However, if they pay in a lump sum, they will repay 21.25% of the loan. For example, in case someone received 200,000, he will return 50,000 euros. In case he pays a lump sum, he will return 42,500 euros. That is, it will repay 21.25% of the state loan. This means that the non-refundable is 78.75% Of course, it has the ability to return the 50,000 euros in 60 installments

2. Businesses with a turnover drop of 30% to 70% and a drop in gross revenue in 2020 to 2019, will repay 33% of the government loan. In case a company received 100,000 euros, it will repay 33,000 euros, while if it repays the one-time loan, the amount is limited to 28,050. That is, the non-refundable amount increases to 71.95%.

3. All other companies for all seven rounds will repay 50% of the government loan. In case a company received 50,000 it will return 25,000 euros. If he pays in one installment, he will give 21,250 euros to the Greek state. That is, the non-refundable amount increases to 57.5%.