KPC Finance : Financial Impact Prevention Measures COVID-19

Posted on Mar 19, 2020

Due to the current situation and in order to prevent the effects of the COVID - 19 virus, the government has announced a new € 2 billion bundle of financial measures to tackle business impacts. In addition to this € 2 billion amount, an additional amount of € 1.8 billion will be allocated through the European Special Investment Fund. The Fund was created the previous week in order to combat the effects of the coronavirus spread. The use of the resources will be immediate. According to the Eurogroup decision, this amount may finance various actions, such as business liquidity, employment support and employee income. Overall, there will be further enhancement of business liquidity, by optimally combining funds from the Public Investment Program, the Greek Development Bank and the European Investment Bank Group, in order to ensure maximum leverage. The set of measures, however, has raised a lot of questions for businesses and employees who are trying to figure out if their cases are included in the relevant legislative framework.

Below we will analyze what has been officially announced so far. For new developments and further clarifications of the new measures, you will receive a new follow-up accordingly.                           

1)     Business Financing

An extended financing framework of € 1 billion with an extended repayment and grace period will be implemented for all businesses severely affected by the emergence and spread of coronavirus. The amount of available funding will consider the reduction in business turnover,  the wage and non-wage costs of employees.  Necessary requirement of this funding is the preservation of existing jobs.


2)     Suspensions of taxes and levies

The measures, however, are strictly for businesses in the most affected sectors by the emergence and spread of coronavirus. The measures are horizontal, as they apply to all businesses with specific Activity Code Numbers (ΚΑΔ), whether they remain open, operate part of their business, either they close on governance’s order either they close on their own initiative. The Activity Code Numbers will be designated by the Ministry of Finance based on the day-to-day database of transactions, in conjunction with relevant decisions to ban the operation of specific sectors that have been issued. The period of application of the measures is March, and, if required, will be extended. The following payments are suspended for all businesses in these sectors for 4 months (until July 31 of March) with debt-free interest and surcharges:

·       Payment of debts certified by VAT statements, payable in March.

·       Payment of any type of certified debts to the Tax Service or to the Audit Centers.

·       Payment of partial arrangements for established debts.

It is emphasized that the maintenance of existing jobs is a prerequisite for the suspension of tax and insurance obligations.


3)     Freelancers, self-employed and Sole Proprietorship

For self-employed and Sole Proprietorships operating in sectors with a sharp decline in their economic activity due to the emergence and spread of coronavirus, all tax liabilities, payable in March, are deferred for 4 months.


4)     Facilitation in the banking system


Banks are already suspending until September the bankruptcy payments for coherent businesses. This facilitation relates to legal entities belonging to sectors directly affected by the current crisis. Banks will also undertake other interventions for individuals. At the same time, with the help of financial instruments, business liquidity will be enhanced through banks. Basic daily transactions which do not require a physical presence in the bank will be identified. The stores will remain open, but the upcoming days the direct transactions will be limited in order to safeguard the health of workers and traders.


5)     Intervention in the real estate market


Specifically, for businesses that are compulsorily discontinuing their business due to the spread of the virus, it will be provided by law that they will pay 60% of the rent for March and April.  At the same time, however, for the owners of real estate in the above cases, it is foreseen to suspend payments of their tax liabilities and payment of installments of certified debts, for 4 months.


6)     Unified Property Tax

The Unified Property Tax (ΕΝΦΙΑ) of 2020 will be based on the previous regime and the new objectives will apply the next year, in 2021.


7)     Outstanding Liabilities

The Independent Public Revenue Office proceeds with immediate repayment of all outstanding liabilities to citizens and businesses, refunding up to € 30,000 in all cases under review. It also simplifies procedures to avoid delays and to not deprive liquidity. Since February 25, the date of adoption of the first Legislative Content Act, until March 13, the amount of € million has been returned. According to the statement from the Ministry of Finance, the effort will continue and will get intensified.


8)     Employees

All employees for which their contract of employment is temporarily suspended due to the suspension of the operation of a state-mandated company will receive a compensation of € 800 in the beginning of April from the state budget. The State fully covers the insurance, pension and health rights of workers and their social security contributions based on their total nominal wages. For these employees, the payment of  tax liabilities for March is suspended for 4 months.


More specifically:


If the employee's company is closed by mandatory decision, then as to the employee's remuneration:


The employer has no obligation to pay. This is because the decision to close the businesses came as a result of force majeure. Force majeure occurs when the unpredictable and unforeseen is not only the originating event but also the damage caused by it. If force majeure causes only a limited or temporary inability of the employer to accept the work of the employees, the employer shall be exempt from payment of arrears under Article 656 of the Employment Code. (Document: 35870/661/07-08-2017).


Remuneration to be received by employees of businesses that remain closed by the public authority decision:


The Legislative Content Act of 14.3.2020 establishes a special mechanism for the support of employees, whose companies operation has been temporarily banned because of emergency measures to deal with coronavirus, including measures of financial support, special compensation, special allowances. Therefore, we expect the specificity of this measure, which  will provide a monthly allowance (up to € 500) to each employee while covering insurance contributions.


The same will apply to part-time or rotational employees:

Yes. And part-time and rotational employees will be entitled to the same allowance as they will not receive payment from their employer. There will probably be a proportionate treatment of the benefit based on their weekly hours of employment.


Procedure for informing the state of the closure of a business to initiate the payment of workers by the state:


Employers who are subject to or have been subject to the temporary prohibition measure, are required to submit a responsible statement to the Information System, ERGANI (ΕΡΓΑΝΗ), of the Ministry of Labor and Social Affairs declaring that their business is under a temporary ban. The data of the employees of these companies are automatically extracted from ERGANI.


Procedure for payment of employees by the State:


Employees under an employment agreement with business that were forced to close shall submit an individual responsible statement on an electronic platform maintained for this purpose by the Ministry of Labor and Social Affairs. Employees declare their personal information, their personal bank account information (IBAN), as well as the details of the company in which they work to be included in the special support mechanism.


Providing the possibility of exempting employees from this measure:


The following specific support mechanism excludes: (a) remote employees, (b) employees that are in any type of leave of absence, (c) security personnel, and (d) employees whose employment is not suspended due to the operating ban of businesses.


If the company shuts down on its own decision, then the employee is entitled to remuneration:

The employer is obliged to pay all the remuneration to the employee.


In case an employee is preventively quarantined by a public authority:

He is entitled to remuneration for which, one part will be subsidized by EFΚA and the remainder by the employer.

How many days of sickness can an employee receive:

It depends on how many days the employer will subsidize. The subsidy days are related to the years of employment of the employee at the employer. If an employee is employed for <1 year then he / she is entitled to a subsidy of 13 days of sickness. If an employee is employed for> 1 year then he is entitled to 1 month sick pay.

If a worker voluntarily goes into quarantine for safety reasons, what about his / her remuneration:

He is not entitled to his remuneration and must therefore be treated differently eg. use of regular leave of absence.

Easter Bonus:

The Easter Bonus is compulsory and must be provided up to April 15 . However, for those employees who are not currently working due to the mandatory closure of the business, they will not receive the corresponding share in the Easter Bonus for that period.

The employer has the right to terminate employee contracts:

Certainly, this is right. In case of fixed-term contracts, they can be terminated early (without the obligation to pay compensation ) if there was a termination clause in the contract with the employee. We pay attention to adhering to the limits of collective redundancies.

What about terminating employment agreements in a business on which its activity is banned:

When the business is closed by a public authority decision, it is forbidden to terminate a contract with an employee who is even expected to be subsidized by the state for the days that the business is closed. When the business remains closed by the employer's decision then the termination of the contract is allowed.


Special Purpose Leave of absence:

It is the Leave of absence of one of the 2 parents with a child who is in a nursery, kindergarten, elementary, high school or special education school unit to guard him / her, because of the closure of schools.

What are the benefits of a special purpose Leave of absence:

The 2/3 of the Special Purpose Leave of absence is paid by the employer and 1/3 by the state as determined by the Ministry of Labor. For every 3 days of special purpose leave, the employee will receive 1 extra day of leave that will be deducted from his normal leave.

How is the Special Purpose Leave of absence obtained:

With a responsible statement of the employee to his / her company accompanied by a responsible statement of the other parent that he / she will not receive it from the other employer.

What if both parents work:

Only one parent is legitimate to receive the special purpose leave of absence.

What if both parents are working remotely:

None of them is legitimate to receive the special purpose leave of absence.

What if one parent is an employee in the private sector and the other is a freelance professional:

Only the employee of the private sector is legitimate to receive the special purpose leave of absence.

What if one of the parents is unemployed:

The parent who is working is not legitimate for the special purpose leave of absence.

In case that the parents are divorced:

Only the parent who has custody of the child is entitled to the special purpose leave of absence.

What applies to pregnant women:

There is no specific treatment other than recommendations for remote work.

If the employee is not entitled to a regular leave of absence, what applies for the special purpose leave of absence:

The employee will receive this leave in proportion to the days of regular leave he is entitled to. If he is not entitled to regular leave of absence, then the employee is not entitled to special purpose leave of absence as well.

If the employee is employed on a rotational basis eg. 3 days a week (MO-WE-FR), then the charge for this leave of absence is as follows:

The 3 days of special purpose leave of absence and the additional 1 day of regular leave of absence will relate to business days.

Exceptions to this leave of absence:

Yes, there are. Specifically:  For the grant of the special purpose leave of absence of Article 4 (3) of 11.3.2020 Act of Legislative Content to parents who work in companies active in the energy and water sector and must act for uninterrupted power supply of the country in electricity, gas, liquid fuels and water supply, to businesses / employers dealing with the production, transport and supply of foodstuffs, fuels, drugs and paramedics to shops / businesses and sell relevant species required a reasoned decision of the competent organ of enterprise management. The competent authorities shall decide whether, based on the position and duties of the working parents, special purpose leave may be granted or, if both parents are employees of the above companies or undertakings, to either of them. parents can provide.



The forms that their submission has currently been suspended:

Until April 10, 2020 is suspended the employer's obligation to register in the "ERGANI" information system of the Ministry of Labor and Social Affairs any changes or modifications to the working hours and the hours of overtime employment. The obligation to register the following forms is suspended until April 10, respectively:

α) Ε4: Table of personnel - Supplementary Hours

β) Ε8: Overtime employment

γ) Ε12 – e-ΟΙΚΟΔΟΜΩ: Announcement of the Employed Personnel in the performance of construction or technical work.

How the employer informs ERGANI for shifts, overworks and overtime:

The employer shall use the "ERGANI", to update any change or modification of the working hours and overtime employment, which was made within the previous month during the first ten days of the following month of the work provided.

Due to the reduction in work, the employer wants to reduce weekly work hours as agreed with the employees. How he will capture it in ERGANI:

The employer will do so by the 10th of next month

Right of employer to impose remote working:

The employer has the right to impose remote working as obligatory.

What applies for special purpose leave of absence and remote working:

The special purpose leave of absence and remote working can not be combined. Remote working prevails.