The absence of customers in the hotel, catering and events sectors as well as the disruption of supply chains in the industry are the two major repercussions of the coronavirus on the Luxembourg economy
Negotiations with neighbouring countries to extend the number of days permitted to work from home are being accelerated in light of the spread of covid-19.
During an exchange of views within the economic commission on Thursday, economy minister Franz Fayot (LSAP) said that if cross-border workers from the Grand Est region are no longer able to travel to work in Luxembourg, it could pose a “massive problem” to the economy and health sector.
He said that negotiations are underway with relevant bodies in neighbouring countries to adjust the number of days people can work from home and avoid creating fiscal complications.
At the same time, Fayot gave more information on the different financial measures available to limit the economic impact of covid-19 on Luxembourg businesses.
Aid is being made available on three levels:
Short-time working (see the specific partial unemployment due to the coronavirus). Up to 80% of the salary can then be covered by the employment fund. Fifty companies have already applied for April. The deadline is 20 March when the economic committee (which is also attended by the social partners) will meet to consider applications for next month.
A new aid scheme for small and medium-sized enterprises will be launched imminently. It will complement the so-called “de minimis” aid. It should enable SMEs to apply for repayable aid of up to €200,000. A draft law, adopted by the government on Wednesday, will be discussed in parliament next Thursday. There is no ceiling on the budget, the minister explained.
The government is also asking the European Commission to permit flat-rate aid to SMEs of up to €500,000 and grant state guarantees to companies wishing to take out a bank loan.
Fayot said he expected that the situation could worsen for companies in the light of new developments such as the travel ban in the United States for European Union nationals.
A press conference is scheduled for Friday afternoon to further expand on the financial compensations available for businesses in Luxembourg.