De Croo is once again putting in place a battery of...

De Croo is once again putting in place a battery of...
De Croo is once again putting in place a battery of...

Just like in the first wave, the De Croo government is working on a battery of aid measures that should once again support the economy. Everything comes back: temporary unemployment, the postponement of payments, bank guarantees and support for the very weak.

There is a serious package of aid measures on the government table, which must be closed on Wednesday. First, an inter-cabinet working group meets, then a meeting of the chiefs of cabinet follows, after which another meeting of the core cabinet is scheduled.

According to Minister of SMEs David Clarinval (MR) – who focuses on the core for Sophie Wilmès, who is still recovering from Covid-19 – 38 measures are already on the table for the self-employed alone. The extension of the bridging loans is one of them, and one with a major budgetary impact.

The extension of temporary unemployment, to which PS Deputy Prime Minister Pierre-Yves Dermagne (PS) puts his full weight behind, is such an important measure that must allow no one to be left behind, which is the motto of Prime Minister Alexander De Croo (Open VLD) has turned into the corona crisis.

The decision to again offer companies a postponement of social security payments is another important aid measure. Even the ‘bazooka’ that De Croo put into position as then Minister of Finance is back on the table. There is renewed consultation with the banking sector so that guarantees can be given for loans to companies.

Arsenal

Almost the entire arsenal of aid measures deployed in the first wave is resurfacing: ranging from the ‘Carry back’ scheme, which allows corona losses to be deducted from past profits, to the postponement of VAT payments and payment of withholding tax. An extension of the Tax Shelter Covid-19, the tax advantage for those who invest in new shares of small companies that saw their turnover fall by 30 percent, is also being considered.

In addition, the Task Force for Vulnerable Persons has been reactivated. The proposal is on the table to give social workers 50 euros extra per month, as in the first wave. With winter just around the corner, it is also crucial that electricity and heating bills are paid. It is clear that the PCSWs are coming under pressure again due to an increasing number of requests for support. With the new lockdown, there are also fears of a further increase in domestic violence.

Budgetary impact

“In any case, this will cost a lot of money,” notes a negotiator with concern. On Tuesday, technicians were working feverishly to map the budgetary impact of the measures so that a balanced package can be approved. There are fears that some measures, such as the extension of the postponement of social security payments, could put pressure on the funding of social security. This is certainly the case if this measure is widely applied, and is also awarded to the suppliers of affected sectors.



The fear is that some measures may put pressure on the funding of social security.

The governor of the National Bank, Pierre Wunsch, said in the House a few weeks ago that care must be taken to ensure that the aid measures in the second wave are targeted. He did not think it was a good idea to extend the broad support measures for companies until the end of 2021. If only because public finances have to be monitored. The shortages we are heading for cannot be sustained in the medium term, it was said.

The government realizes this too, although these are worries for later. Now broad support measures are on the table again, such as during the first wave. The evaluation should follow later.

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