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Government to weigh compensation to businesses hit by closures

Government-imposed restrictions are causing losses for bars, restaurants and most private recreation venues.

Suljettu-kyltti ravintolan ovessa.
The government decided to close restaurants in areas in the acceleration and spreading phase for three weeks. Stock image from February 2021 showing closure notices on a restaurant window. Image: Silja Viitala / Yle
Yle News

According to information available to Yle, the government is scheduled to deal with the issue of subsidies to companies shut down due to Covid as early as next week, before sending a proposal to parliament.

The government wants to compensate business owners after it used emergency powers to order the closure of businesses, including restaurants, cafes, bars and nightclubs for three weeks. Finland has also taken steps to encourage private sports and leisure venues such as gyms to close their doors to all business.

The closure mainly affects companies in areas in the acceleration and community spreading phases of the epidemic, and started on Monday 8 March.

In a statement issued in January, Parliament's Constitutional Affairs Committee strongly emphasized that companies must be provided with financial support if they are ordered to be closed.

In a recent proposal for compensation to restaurants, the government estimated that the cost of closures would be 50 million euros. However, Yle has been told that this sum has mainly been a rough working figure used by various ministry officials.

The actual costs will only become clear once the state pays compensation to companies that meet the criteria for compensation.

Funds from state treasury

The government also offered support to restaurants last spring, when Parliament approved closures of about one month beginning in late March. At that time, the restaurants were eligible for a two-part subsidy made up of compensation for lost income, and supports the re-employment of staff.

Last year, those funds were paid out by a joint organ of the Centres for Economic Development, Transport and the Environment and TE-Services employment centres. Now, support is to be paid directly to companies from the state treasury.

The change, in part, is intended to speed up payments.

The government announced a package at the end of last week aimed at providing support to companies whose turnover fell by at least 30 percent between November of last year and February of this year.

This proposal is already under consideration by Parliament, so inclusion of compensation for losses during the current government-imposed closures will depend on approval by a majority of MPs.

If the aid for businesses suffering losses due to closures can be integrated into the larger support package, it should be available to companies in mid-April.

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