Municipalities in Latvia will have the right to receive state budget loans to increase base capital of municipal companies if their turnover drops more than 50% because of COVID-19 crisis, as provided by amendments supported by the Cabinet of Ministers on April 9.
Finance Ministry explains that for municipalities as capital shareholders to support companies affected by the crisis, they will have the right to receive state budget loans to increase base capital of those companies.
Eligibility for support will be affirmed if the turnover of a company affected by the crisis declines 50% when compared to the same period of 2019.
With state support base capital of companies controlled by municipalities will have to be increased to secure resources to cover maintenance expenditures – payment of wages and coverage of utilities.
Investments in base capital will be calculated with respect of the period of time during which restrictions are in force. It is expected the repayment term of state loans will by up to 12 months.
The Saeima will need to decide on this solution soon.
As previously reported, the state of emergency declared in Latvia over the COVID-19 pandemic has been extended to mid-May.
To limit the spread of COVID-19 in Latvia, the government decided to declare a state of emergency, which was originally set to conclude on April 14. During the state of emergency the government also adopted a number of restrictions. Although progress was observed in recent days, Latvia’s government decided to extend the state of emergency for nearly a month regardless. (BNN/Business World Magazine)