Actualités juridiques
COVID-19
Covid-19: Draft bills 7703, 7704 and 7705
In its opinions on the draft laws relating to the new aid measures announced by the Government on 13 November 2020, the Chamber of Commerce welcomes the related support measures that give more security and predictability to businesses. It commends the introduction of a temporary State contribution to the costs[1] of certain companies that are not covered, as well as the extension of the application period of the business support schemes already in force. The Chamber of Commerce stresses the importance of administrative simplification and insists that the formalities for obtaining aid should be simplified to enable companies to benefit quickly from it without unnecessary administrative constraints.
A first draft bill concerns the introduction of a temporary State contribution to costs that are not covered. A second draft bill aims at extending the recovery and solidarity fund for businesses over the long term and to the sectors hardest hit by the health crisis. A third draft bill extends the period of application of aid schemes for businesses, adopted as part of the fight against the economic and financial consequences of the Covid-19 pandemic.
This health crisis continues to produce adverse effects on the economy, negatively impacts the smooth running of businesses and threatens the survival of many SMEs. The duration of this crisis and the prospects for economic recovery remain uncertain. In this unprecedented socio-economic situation, it is therefore necessary to continue to support the Luxembourg companies most affected by targeted and effective aids, in order to prevent the massive destruction of economic substance, jobs and investment capacity and contribution to future tax revenues. For these reasons, and with a view to giving companies greater security while planning their future activities, this aid represents a first step in a long period of economic recovery.
The Chamber of Commerce welcomes the long-term extension of part-time work and the State guarantee now available until June 2021. The Chamber of Commerce is also asking that the aid from the recovery and solidarity fund and for uncovered costs also be available until June 2021 to all companies for which the pandemic has led to the suspension or reduction of activities. It also requests that the European criterion on loss of turnover for aid for uncovered costs of 30% be taken into account, compared to the 40% provided for in the current bill. As far as the Chamber of Commerce is concerned, all leeway allowed by the European Commission's temporary framework must indeed be leveraged in order to best support the most affected companies.
The Chamber of Commerce stresses that the procedures for applying for financial support must be simplified to allow fast processing by companies and an accelerated granting of the aid by the administration, a measure that is essential in the current situation.
In view of the new health restrictions announced on 23 November 2020 by the Government, the Chamber of Commerce is pleased to note that the draft bill on uncovered costs provides for the inclusion of 100% of charges in the context of determining the costs eligible for companies from sectors that are forced to close completely and suspend their activities. It also emphasizes the importance of considering the fact that these closures will have repercussions on other sectors, which are not forced to suspend their activities in the strict sense of the rules, but which will suffer from lack of business following the health measures and the cessation of activity of their customers. The Chamber of Commerce stresses the need to allow companies in such a situation to also benefit from their charges being 100% taken into account when determining eligible costs.
The Government's announcement[2] to increase the social minimum wage by 2.8% on 1 January 2021 is completely at odds with the difficult situation currently faced by many companies that will suffer from additional wage costs through this measure. The effectiveness of the business aid offered by the Government risks being hampered by the political choice to increase the minimum wage in this most perilous and uncertain economic context which, once again, will have a negative impact on the competitiveness of the Luxembourg economy and employability of resident employees and low-skilled job seekers. This increase in minimum wage risks shutting down many companies. In this case, it would also render inoperative the aid previously allocated to companies, the financing of which has a heavy impact on the country's public finances.
The one-off compensation of EUR 500 per employee proposed by the Government can in no way compensate for the lasting effect of the increase in the minimum wage, which will also upset the entire Luxembourg salary structure, widening the differences in salary growth between Luxembourg and neighbouring countries and further separating labour costs from productivity, which should be the measurement benchmark.
Support for businesses from the House of Entrepreneurship
In order to facilitate incoming requests for the new aid measures as well as to ensure the completeness of the file within the framework of State support measures, the House of Entrepreneurship of the Chamber of Commerce offers support to companies requesting help.
For related questions, any business can contact the House of Entrepreneurship by completing the attached form available here.
Alternatively, businesses can send an email to covid19@houseofentrepreneurship.lu , mentioning the name of the applicant, the name of the company, a telephone number, an e-mail address, as well as the sector of activity concerned.
The complete versions of the Chamber of Commerce opinions are available in French here:
- Avis sur le projet de loi n°7703 ayant pour objet la mise en place d'une contribution temporaire de l'Etat aux coûts non couverts de certaines entreprises
- Avis sur le projet de loi n°7704 ayant pour objet la mise en place d’une nouvelle aide de relance en faveur de certaines entreprises
- Avis sur le projet de loi n°7705 portant modification et prolongation des régimes d'aides
[2] The Chamber of Commerce will publish an opinion on the related draft bill shortly.