Dutch push another €13 billion into coronavirus business support
With reporting by Janene Pieters.
The government is pushing another 13 billion euros into supporting entrepreneurs who are facing financial ruin due to the coronavirus crisis. The current package of emergency measures, which was set to expire on June 1, will be extended by three months, Prime Minister Mark Rutte announced on Wednesday.
Ten billion euros will go to extending the NOW scheme to help employers retain their employees for another three months. About 1 billion euros was earmarked to support small and mid-sized businesses (SMEs)for the next three months if they have lost at least 30 percent of their turnover, and another 50 million will go towards a new program to retrain workers.
One critical change was announced for many self-employed people using the TOZO payment scheme to boost their incomes up to the basic income level. While before, the incomes of their partners were irrelevant to qualifying for the program, a partner's income can disqualify someone from the program starting in June. The government was also leaning towards rejecting a scheme to pay 600 euros monthly to flexible and temporary workers who no longer have paid work.
There is much trouble on the horizon, cautioned the country's social affairs minister, Wouter Koolmees. "A difficult time is coming with bankruptcies and unemployment," he said.
According to Rutte, the coronavirus crisis is having an enormous negative impact on the Dutch economy. He called the unemployment figures in particular dramatic. "That makes it all the more important to support entrepreneurs and their employees as well as possible," he said in a 30-minute press briefing following the weekly meeting with cabinet ministers.
"Ultimately, the goal is to protect jobs as best as possible, while at the same time guaranteeing that entrepreneurs and workers adapt to the new reality and to the lasting changes that are becoming visible in our society."
More support for now, but not forever
Rutte's briefing was followed by a joint press conference held by Eric Wiebes, Finance Minister Wopke Hoekstra, and Koolmees. The Ministers agreed to extend the support package currently available to businesses by three months, with some adjustments.
"We entered this crisis with a good starting position: A flourishing economy and the lowest unemployment ever. This package gives us the space in the coming months to live in the new reality. It will require a lot of resilience and solidarity from all of us," Hoekstra said.
The new support for SMEs will provide businesses eligible under the current TOGS scheme with an additional tax-free allowance to pay for fixed costs. The contribution maxes out at 20,000 euros for a three-month period.
The ministers also said the NOW scheme, for businesses expecting a 20 percent fall in turnover, will also be extended through August. It will also be expanded to allow the cash to be spent on other costs, not just labor, with more flexibility to help businesses which rely upon seasonal workers. Businesses taking advantage of NOW are not allowed to disburse profits to shareholders, buy back shares, nor make bonus payments to management and board members. Any company which uses NOW will be obligated to to encourage their staff to take on additional trainings.
Wiebes cautioned that the money cannot be paid forever, and that businesses will have to stand on their own two legs. He said support will be more targeted, restating what he said in an interview published over the weekend that entrepreneurs must be prepared and must be flexible. "The post-crisis economy will be different from yesterday's economy," he said. "We all know that there will come a time when it is no longer the taxpayer who has to adjust, but the entrepreneurs who have to adapt."
"All Dutch people will feel this. We know that we have entered a recession, and the consequences can be drastic. We ask every entrepreneur, every self-employed person, every company for adaptability," Hoekstra said.
More details about the aid package will be revealed later, with the sectors most targeted for support still under debate.
Finance Minister hopeful despite joblessness jump
Unemployment figures released earlier in the day had caused an "immediate stomach ache," Hoekstra said earlier in the day to newswire ANP. But he said the Cabinet was not deterred, and promised to do whatever it takes to rescue companies and protect jobs.
"I very much hope that the combination of a new emergency package and the reopening of society, hopefully with some good weather, will help enormously with business activity and employment."