Job-keeping support for Croatian businesses announced

PM Andrej Plenkovic (screenshot)

ZAGREB, Oct 20 (Hina) – Prime Minister Andrej Plenkovic on Tuesday announced a new HRK 350 million set of measures designed to help the enterprise sector in the COVID pandemic circumstances until the end of this year.

Outlining the new package, the premier told a news conference that the first measure would be about shortening working hours per week, and the second assistance measure would be graded according to a downturn in the volume of business.

Our intention is to simplify the procedure and to enable a wider range of employers and businesses in certain sectors to be eligible to use the measures, Plenkovic said while presenting the new set of measures aimed at overcoming the corona crisis.

Considering shorter working hours, the measure will allow for shortening up to 70% instead of the current 50%.

The maximum monthly grant per worker will increase from the current HRK 2,000 to 2,800, he added.

Plenkovic recalled that to date, 606 employers with more than 30,000 workers on their payrolls had used this shorter working hours measure in times of crisis.

The graded assistance will depend on a downturn in the volume of business.

Thus, businesses with at least a 40% fall in their activity will be eligible to use monthly grants of HRK 2,000 per employee.

Those businesses with a 50% fall in their turnover can count on monthly grants of HRK 2,500 per employee.

Those employers experiencing a slump of up to 55% in their business activity can be awarded 3,000 kuna per employee per month, whereas 3,500 kuna is designed for a slump of up to 60%, and the highest monthly grant per employee in the amount of HRK 4,000 is to be given to businesses with a slump of more than 60% in their business activities.

Also, those employers are exempt from paying contributions in relation to those grants.

The fall in business activity will be compared to the volume of business in the second and third quarters in 2019, so as to get a more realistic picture.

Some businesses in the hospitality sector will be able to choose whether to compare the current state of affairs on a monthly basis or in relation to the quarters year-on-year.

The new set is applicable as of 1 October this year, and the government estimates that 300 to 350 million kuna will be needed to cover it.

The prime minister underscored that to date, the government had disbursed HRK 6.85 billion for the job-retention scheme and that this amount will have risen above HRK 7.2 billion by the end of this year.

The latest set has been hammered out following consultations with social partners, employers and trade unions, he said.

Employers satisfied with measures but say many still face closure

The Croatian Employers Association (HUP) said on Tuesday it was satisfied with the redesigned measures to help the economy but warned that labour was not the only operating cost, that liquidity remained a serious problem for many and that even a revenue drop of less than 40% could be fatal, notably for SMEs.

We hope the redesign will make it possible to keep many jobs and prevent closures, which is in the interest of all employers and should be kept in mind when adopting epidemiological measures, HUP said in a press release.

It added that besides a fall in revenue, employers had higher costs for raw materials and parts, logistics and transport as well as health prevention.

For recovery in 2021 to be as easy and swift as possible, it is necessary to reduce or abolish parafiscal levies and to simplify the administrative burden, HUP said.

HUP has polled its members from the manufacturing industry and they expect 2021 to bring only a mild recovery, the shorter working week to continue and favourable funds to be ensured for liquidity and investment.

Employers say the three biggest problems at the moment are a lack of new contracts and orders, lateness in the delivery of raw materials, and liquidity.

Despite the crisis, only 2.7% of workers in the manufacturing industry have been laid off due to lack of work. HUP said this showed that even in times of crisis, employers’ first reaction was not to lay off workers and that the job retention measures adopted in the spring were timely.

(€1 = HRK 7.575405)