Business news

Businesses reckon EUR 2-4bn stimulus package needed

Ljubljana, 23 March (STA) - Virtually all Slovenian businesses have been affected by the coronavirus pandemic and its ramifications with 93% of the companies surveyed by the Chamber of Commerce and Industry (GZS) reporting serious difficulties. The chamber estimates a stimulus package of up to 4 billion euro is needed to avert an economic and social crisis.


"The situation at businesses is getting more alarming by the day," the GZS stated on Monday as it released the results of a survey conducted last week among micro, small, medium-sized and large companies.

Four out of ten companies estimate their revenue will drop by more than 70% in March due to disruption to business caused by coronavirus, a further 18% expect to halve their revenue and as many project a fall of at least 30%.

Micro and small businesses have been particularly hard hit with half of them expecting more than a 70% fall in revenue.

Current estimates show more than half of the companies surveyed expect a slump in business over the next three to six months and one out of three expect a limited scope of operations to persist for more than six months.

A large majority (61%) have been hit hardest by a drop in domestic demand and government measures banning direct sale of goods and services to customers, suspended public transportation and school closure (59%).

Over a third (37%) report difficulties due to lockdowns and similar restrictions in other countries, and almost as many (35%) say they have been affected by a drop in foreign demand.

Other problems reported by the companies surveyed include disruption to international transport (29%) or disrupted supply chains (20%). Some are complaining about a lack of protective equipment.

"Fact is that we have already moved from a health crisis deeply into an economic crisis. Experience suggests that a health crisis takes about two and a half months. In a similar scenario in Slovenia the epidemic jeopardising people's lives could be weathered by roughly mid-May," the chamber said.

It added that the decisions that were being taken by the government these days would decide how deep and how long the economic crisis, and hence the scope and length of social turmoil.

Businesses expect the state to fully cover the cost of the temporarily laid off labour force, defer tax liabilities, take measures to secure liquidity and labour market flexibility, set up a one-stop shop offering topical info for companies, ensure smooth movement of goods across the border and measures to secure claims in some markets.

The GZS estimates that for the Slovenian economy to remain in business and preserve as many jobs as possible liquidity measures of between two and four billion euro are needed, urging the government to draw up a new emergency package.

The chamber has sent its list of proposals to the Ministry of Economic Development and Technology.

The GZS has also joined a group of several other business associations, including the Slovenian-German Chamber of Commerce, the British-Slovenian Chamber of Commerce and AmCham Slovenia, who called for fast action to help businesses.

The group offered to the government and the crisis busting taskforce headed by economist Matej Lahovnik "all the expertise that Slovenian managers, entrepreneurs and economic and management experts can offer".

The calls come as a growing number of business are suspending or scaling down their operations to the minimum. The latest to announce a temporary closure of its 18 shops across the country has been the Croatian bakery chain Mlinar.

The glassworks Steklarna Rogaška reduced its production to 7% capacity because it cannot halt the melting furnace without long-term consequences. The decision was taken in agreement with its owner, the Helsinki-based Fiskars Group, the trade union and the works council.

The Zreče-based tool maker Unior has reduced production as well, but is still meeting its obligations to buyers, and business is continuing as usual in the division catering to the automotive industry.