COVID-19: Emergency government support in AustriaDescribed by some as the “greatest challenge” facing Europe “since the second world war”, the COVID-19 crisis is a global human catastrophe. In many countries, including Austria, governments have taken recourse to mandatory closure orders and restrictions on the free movement of persons. As a result, public life has largely come to a standstill – with grave consequences for businesses large and small.
Over the course of this week, the Austrian government has announced financial support measures for businesses in an amount of up to EUR 38 billion.
Liquidity supportCompanies conducting the significant part of their operative business in Austria will be able to apply for bridge loans or comparable measures provided by a state-owned divestment holding (ABBAG) in order to maintain liquidity or bridge liquidity needs in connection with the COVID-19 crisis.
Guidelines as to eligibility, form and purpose of the financial support measures as well as on the amount and maturity are yet to be clarified by the Austrian Ministry of Finance. It is likely, that these measures will take the form of loans granted or guaranteed by Oesterreichische Kontrollbank (OeKB).
Immediate assistanceThe government has set up a crisis response fund (Krisenbewältigungsfonds). Currently, EUR 4 billion out of the total EUR 38 billion emergency government programme would be dedicated to immediate assistance to be distributed via different ministerial departments.
Bridge guaranteesQualifying small and medium-sized enterprises (SMEs) will benefit from a guarantee programme administered by the Austria Wirtschaftsservice Gesellschaft (AWS) which allows them to claim support for working capital financing as well as in connection with deferral of existing loans. The guarantees will cover up to 80% of a loan of up to EUR 2.5 million per entity and will be subject to a risk based premium. Beneficiaries must be financially sound.
Other financial supportFurther, the government has announced to make available tax deferrals and reductions in an amount of up to EUR 10 billion and emergency aid for businesses affected by the mandatory closure order of up to EUR 15 billion. Additional support will be available for small enterprises, family businesses and self-employed persons.
The current situation brings unique challenges, both for businesses in Austria as well as international investors. Against the background of a continuously evolving legal environment, an experienced legal advisor allows businesses to identify and solve issues early and efficiently.