In support of the bill “Law on Supporting the Economic Consequences of Sanctions and Countermeasures for Russia’s Military Aggression Against Ukraine”, the government on Tuesday approved € 94.9 million in support for companies affected by Russia’s military aggression in Ukraine.
It is planned that economic operators affected by the effects of the military aggression in Ukraine, such as declining demand, declining existing contracts, declining turnover, supply chain disruptions, rising prices and restrictions on further investment, will be eligible for support. No aid will be granted to economic operators subject to international or national sanctions.
Support for companies will be provided in the form of financial instruments – EUR 39 million for working capital and investment loans, EUR 22.5 million for guarantees and another EUR 1.3 million for export credit guarantees. Also 32.1 million euros – for investments in companies to adapt their business model, improve export capacity, conquer new markets, new technologies and process optimization, as well as product development in the conditions of Russia’s military aggression against Ukraine, attracting private financiers, thus facilitating market access .
It is planned that the new support programs for loans, guarantees and export guarantees will be submitted to the government for consideration by the beginning of June, and the equity fund program – by August. Support programs for entrepreneurs will be available after the adoption of the draft law in the Saeima and coordination of support programs with the European Commission.
State budget funding is provided for the implementation of the new support programs, which was previously granted to JSC “Attīstības finansīcija” Altum “” (“Altum”) in accordance with the Law on Coping with the Covid-19 Infection. , as well as financing repaid under the short – term export credit guarantee scheme. During the government meeting, the Minister of Economics Jānis Vitenbergs (NA) mentioned that separate regulations of the Cabinet of Ministers will be developed for the provision of support, which will specify the requirements for receiving support.
During the discussion on the adoption of the bill, the Minister of Justice Jānis Bordāns (K) expressed the opinion that the state would not need to support entrepreneurs who, having been in the Donbass war for eight years, have continued their business in Russia. The Minister of Justice also pointed out that, given that the law does not set requirements for companies to receive support, there are risks of corruption. Bordan hopes that such risks can be eliminated by the regulations of the Cabinet of Ministers mentioned by Wittenberg, however, according to the current wording, it turns out that everyone can receive support. At the same time, Bordan also explained that he may have initially misunderstood the procedure for providing support – the Minister of Justice felt that the state would support those entrepreneurs who had already moved away from the Russian market and shifted their export markets towards the West.
During the meeting, the Minister of Finance Jānis Reirs (JV) pointed out that due to the war in Ukraine, companies involved in the extraction of raw materials have faced special problems. Reirs also called on Altum to provide information on how well the funds issued to entrepreneurs during the Covid-19 crisis were recovered and how much money the state lost.