Govt to reimburse restaurants, bars cost of closure

The government on Thursday submitted a proposal to the parliament with the view to compensate the restaurants and bars that remained closed in order to stop the spread of the coronavirus, said an official press release.

This new form of compensation would apply to small and micro-sized enterprises that employ a maximum of 49 employees. The government will prepare a separate compensation for larger companies as soon as possible.

The proposal supplements the proposal on the third application round for business cost support, which is currently under consideration by the parliament.

The Act is due to enter into force on 12 April 2021. Companies would apply for the compensation to the State Treasury. Applications for the compensation could be accepted from the beginning of May.

“Large companies are starting to near the limit of aid, EUR 1.8 million, that they can receive under the EU state aid rules. Our negotiations with the European Commission on this matter are ongoing. However, we wanted to get the support to small companies out quickly. That is why there are two distinct support packages for small and large enterprises. Support for the event industry is also being prepared separately,” said Minister of Economic Affairs Mika Lintilä.

This new form of compensation would apply to restaurants and other food and beverage service businesses that are closed from 9 to 28 March under the Act on Accommodation and Catering Operations. However, meals may be sold for takeaway. Such sales would be taken into account in the amount of compensation.

Compensation could also be paid to companies that the municipality or the Regional State Administrative Agency have the power to close under the Communicable Diseases Act. Such establishments include sports facilities, gyms, public saunas, swimming pools, spas, and indoor playgrounds.

The compensation would be paid to companies for the period of closure if they are closed for more than 15 days.

If a company has restricted the number of customers on its premises but has not closed completely, it would not be entitled to compensation. These companies can apply for business cost support.

The amount of compensation would be based on the company’s costs in February 2021 and the share of the company’s business operations that the closure affects.

Compensation would be paid for 100% of payroll costs and for 70% of other costs, such as rent. Previously granted coronavirus support would be taken into consideration and the maximum amount of aid could not exceed EUR 1.8 million as per the EU state aid rules.