Govt promises more direct financial aid to hard-hit businesses

The government on Friday announced additional direct financial aid to medium-sized businesses, which must have been profit makers before the coronavirus crisis and must have a turnover of over 10 million euros, reported news agency Xinhua.

Speaking at a press conference, Minister of Economic Affairs Mika Lintilä said Finland is in the worst phase of its economic history.

Friday's 150 million-euro aid pledge follows the authorization of a billion in aid and 10 billion as loan guarantees, where the state collateral would cover 80 percent, with the rest 20 percent remaining as a risk of the creditor.

Juho Romakkaniemi, CEO of the Finland Chamber of Commerce, told national broadcaster Yle on Friday that direct financial aid to enterprises is the only "sensible way out" from the situation.

Finnish enterprises have criticized, though, the high premiums that the state financing agency Finnvera has charged for its guarantees. Lintilä said earlier the fees could be lowered but Finnvera cannot give them free as it would be seen as aid.

Finnish banks adhere to their normal lending criteria. Frank Vang-Jensen, CEO of Nordea, the Helsinki-based leading Nordic commercial bank, told Finnish language business weekly Talouselama that Nordea cannot help all, and that bankruptcies will be seen.

Also on Friday, the government rolled out several legislative plans to ease the position of the entrepreneurs. The right of creditors to demand a bankruptcy would be limited and the fees collectors can charge would be curbed.

Minister for Justice Anna-Maja Henriksson said the direct marketing of payday loans would be banned to prevent the entrepreneurs in plight to be approached with expensive loan tenders.

Meanwhile, payday loans could maximally charge 10 percent interest, instead of the current 20 percent.