The Saeima is urgently pushing for support for companies to mitigate the consequences of the war in Ukraine

The Saeima is urgently pushing for support for companies to mitigate the consequences of the war in Ukraine

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Support for entrepreneurs is not provided in the form of a gift, but in the form of loans and collateral. EUR 39 million is for loans for working capital and investments, EUR 22.5 million for guarantees and another EUR 1.3 million for export credit guarantees. EUR 32 million will also be allocated to companies to adapt their business model, improve their export capacity, attract new technologies and take other measures.

It is the support of companies that can be most useful in finding new supply routes.

Raimonds Lapiņš, Deputy State Secretary for Economic Affairs of the Ministry of Economics, explained the expected number of beneficiaries at the commission meeting: “500 companies are the group we have identified. For 200-300 companies of all sizes, this tool could be useful, and such visible 50-60 companies will definitely apply because they have obvious problems. This is repayable assistance. This means that these funds will have to be repaid after the target has been reached within certain deadlines to be agreed between the banks and Altum. “

This view of the industry is also supported by public wallet holders. The planned assistance program is a continuation of support for entrepreneurs during the Covid-19 crisis. “The regulation is similar to the Covid-19 Proliferation and Consequence Management Law. On the proposal of the Ministry of Economics, this fund would continue to operate as before. Therefore, the Ministry of Finance supports it,” Gunvaldis Davidovičs, a representative of the Ministry of Finance, emphasized.

Jānis Endziņš, Head of the Latvian Chamber of Commerce and Industry, praised the planned form of support. Firstly, the approach of loans rather than giving is correct, and secondly, the Ministry of Industry has been convinced that the severe consequences will affect a wider range of entrepreneurs this time, taking into account the increase in raw material prices and inflation.

“Unfortunately, the consequences are also affecting the industrial sector. Food producers from various industries are also calling the alarm bells. There is a question at which point when this working capital program will be available to entrepreneurs,” said Endziņš.

Following the decision of the Saeima on the law, separate regulations of the Cabinet of Ministers will have to be developed and the support program will also have the support of the European Commission, so it is to be hoped that this process will not be delayed for too long. At the same time, the joint measurement of the “average temperature” sentiment by the Latvian Chamber of Commerce and Industry and the research company SKDS confirms that entrepreneurs are more prepared for this crisis than before.

“What I must say is that this general mood has fallen, but it is not as sad as at the beginning of the covid crisis and, of course, very far from the 2008-2009 crisis. I think with all the support tools this situation will return to normal,” he said. Endziņš.

It is envisaged that the Saeima will consider this draft law in two readings as a matter of urgency this week. The government must then make its additions and await approval from the European Commission.

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