Implementing decision 2020/1351 - Granting of temporary support to Latvia to mitigate unemployment risks following the COVID-19 outbreak - Main contents

EN

Official Journal of the European Union

L 314/38

On 7 August 2020, Latvia requested financial assistance from the Union with a view to complementing its national efforts to address the impact of the COVID-19 outbreak and respond to the socio‐economic consequences of the outbreak for workers and the self‐employed.

The COVID-19 outbreak and the extraordinary measures implemented by Latvia to contain the outbreak and its socio-economic and health-related impact are expected to have a dramatic impact on public finances. According to the Commission’s 2020 Spring forecast, Latvia was expected to have a general government deficit and debt of 7,3 % and 43,1 % of gross domestic product (GDP) respectively by the end of 2020. According to the Commission’s 2020 Summer interim forecast, Latvia’s GDP is projected to decrease by 7 % in 2020.

The COVID-19 outbreak has immobilised a substantial part of the labour force in Latvia. This has led to a sudden and severe increase in public expenditure in Latvia in respect of the scheme for the compensation of idle time for workers and the related support schemes – the downtime allowance and the workers’ bonus for children, a scheme for wage subsidies for the export industry, and wage support payments for medical professionals and those employed by the cultural industry – as well as health-related expenditure on protective personal equipment and COVID-19 related sickness benefits, as set out in recitals (4) to (7).

‘Cabinet Regulations No 179 (Adopted 31 March 2020) “Regulations Regarding the Allowance for Idle Time for the Self‐employed Persons Affected by the Spread of COVID-19” and No 165 (Adopted 26 March 2020) “Regulations Regarding the Employers Affected by the Crisis Caused by COVID-19 which are Eligible for the Allowance for Idle Time and Division of the Payment for Late Tax Payments in Instalments or Deferral Thereof for up to Three Years”’, which are referred to in Latvia’s request of 7 August 2020, introduced a scheme for the compensation of idle time for workers. The scheme pays wages to employees of private sector companies who have been furloughed. It covers between 50 % and 75 % of employees’ salaries, depending on the size of the business, with a cap of EUR 700 per employee per month. Attached to the scheme for the compensation of idle time for workers are the related downtime allowance scheme and workers’ bonus for children. On the basis of ‘Cabinet Regulation No 236 “Regulations Regarding the Assistance Allowance for Idle Time for Employed or Self-employed Persons Who have been Affected by the Spread of COVID-19”’, which is referred to in Latvia’s request of 7 August 2020, the downtime allowance scheme provides a minimum benefit to furloughed employees or self-employed persons who either do not qualify for support under the scheme for the compensation of idle time for workers due to reasons unrelated to them, or receive less than EUR 180 from it. The benefit ensures a minimum level of support is provided, ensuring that all employees or self-employed persons receive a benefit of no less than EUR 180 per month.

The bonus for children scheme provides additional...