Implementing decision 2021/677 - Amendment of Implementing Decision (EU) 2020/1351 granting temporary support to Latvia to mitigate unemployment risks following the COVID-19 outbreak - Main contents

EN

Official Journal of the European Union

L 144/7

Further to a request from Latvia on 7 August 2020, on 25 September 2020 the Council granted financial assistance to Latvia in the form of a loan amounting to a maximum of EUR 192 700 000 with a maximum average maturity of 15 years, with a view to complementing Latvia’s national efforts to address the impact of the COVID-19 outbreak and respond to the socioeconomic consequences of that outbreak for workers and the self-employed.

The loan was to be used by Latvia to finance the short-time work schemes, similar measures and health-related measures, as referred to in Article 3 of Council Implementing Decision (EU) 2020/1351 (2).

The COVID-19 outbreak continues to immobilise 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 new measures, namely sickness aid benefits for parents and caretakers and premiums for medical practitioners and employees dealing with the COVID -19 crisis and measures referred to in Article 3, points (a), (c), (d), (f) and (g), of Implementing Decision (EU) 2020/1351.

The COVID-19 outbreak and the extraordinary measures implemented by Latvia in 2020 and 2021 to contain that outbreak and its socioeconomic and health-related impact have had and continue to have a dramatic impact on public finances. According to the Commission’s 2020 autumn forecast, Latvia was expected to have a general government deficit and debt of 7,4 % and 47,5 % of gross domestic product (GDP) respectively by the end of 2020. In 2021, Latvia’s general government deficit and debt are forecast to narrow to 3,5 % and 45,9 % of GDP respectively. According to the Commission’s 2021 winter interim forecast, Latvia’s real GDP is projected to increase by 3,5 % in 2021.

On 11 March 2021, Latvia requested further financial assistance from the Union of EUR 112 500 000, with a view to continuing to complement its national efforts undertaken in 2020 and 2021 to address the impact of the COVID-19 outbreak and respond to the socioeconomic consequences of that outbreak for workers and the self-employed. In particular it concerns the measures set out in recitals (6) to (8).

‘Cabinet Regulation No 709 “Regulations Regarding the Allowance for Idle Time for Taxpayers for the Continuation of their Activity in the Circumstances of the COVID-19 Crisis”’ (adopted on 24 November 2020 (3) and amended on 12 January 2021 (4)) extended and amended a scheme for the compensation of idle time for workers, as referred to in Article 3, point (a), of Implementing Decision (EU) 2020/1351. That scheme applies to companies, self-employed persons and payers of the licence fee, whose income from economic activity has decreased by at least 20 %, as compared to August-October 2020 on average. The scheme pays compensation to furloughed employees or self-employed persons of 50 % or 70 % of their salaries or incomes, depending on the tax regime under which they operate. The minimim level of support is set at EUR 500 and the...