All three Baltic governments have set in place financial measures to help companies out of the crisis. The Estonian government adopted a short-term economic support package on 19 March 2020. In addition, new crisis measures were set in place in a supplementary budget for 2020 which was approved by the government on 28 April (subject to more detailed allocation by ministries).

State funds are channelled through state-owned financial institutions KredEx and Rural Development Foundation, some support can be also obtained from the Enterprise Estonia Foundation.

The package also includes Unemployment Insurance Fund labour market support, sickness benefits, tax benefits and allows tax arrears to be deferred for 18 months. It also includes temporary suspension of the government’s second pillar contribution to the pension fund and partial reimbursement of the direct costs of cancelled events.

EUR 300 million was allocated with the supplemental budget to capitalise crisis-stricken enterprises by the state, allowing for repurchase of the shares later. The target group is companies that are economically significant for the nation, as well as exporters who pay labour taxes in large sums.

KredEx Foundation Services

Additional security as loan guarantees for new and existing bank loans (total budget EUR 1 billion):

  • for new bank loans the additional security is up to 90% (but no more than EUR 10 million) per company
  • for existing bank loans the additional security is up to 50% (but no more than EUR 10 million) per company
  • securities for accommodation and catering companies are up to 100% (but no more than EUR 700 000) per company
  • securities for small companies (which have less than 50 employees and turnover less than EUR 10 million) for small loans is up to 100% (but no more than EUR 100 000) per company
  • securities for nationally crucial projects is up to EUR 10 million (but no more than 90% of loan)

Revolving business loans in order to help companies to overcome liquidity problems caused by COVID-19 spread outbreak, including, where necessary, the re-payment of bank loans (total budget EUR 500 million):

    • loans are up to EUR 10 million per company
    • loans for nationally crucial projects are starting from EUR 10 million per company

Investment loans to companies so they can overcome problems caused by the coronavirus (EUR 50 million):

    • loans are up to EUR 10 million per company
    • loans for nationally crucial projects are starting with EUR 10 million per company

The target group of KredEx includes all undertakings registered in Estonia under following conditions:

    • the financial status of the undertaking must be in order as at 31 December 2019
    • the undertaking must not have already encountered difficulties before the crisis and
    • difficulties of the undertaking are directly or indirectly caused by the coronavirus outbreak.

In addition, the supplementary budget allocated 105 million euros via KredEx to support the housing sector (mainly for renovating apartment buildings).

Unemployment Insurance Fund Services

The Unemployment Insurance Fund will support employers who have been significantly impacted by the outbreak of the COVID-19 spread by compensating the income of employees. The total amount is EUR 250 million and is subject to the following conditions:

    • the benefit is available to any qualifying employer for a period of two months requested by the employer within the period from March to May 2020
    • the allowance will be paid up to a maximum of EUR 1,000 per worker per month and
    • the allowance will be payable, as a general rule, at 70% of the gross salary of the employee over the previous 12 months, plus at least EUR 150 gross salary will be paid by the employer.

The Unemployment Insurance Fund and the employer pay all taxes on wages and allowances.

Advance social tax aid measures will be implemented for self-employed workers.

The Rural Development Foundation Services

The government will allocate EUR 200 million to the Rural Development Foundation in order to alleviate the situation of agricultural enterprises. The Rural Development Foundation will offer the following services to agricultural enterprises:

    • a loan surety as a loan guarantee for loans of agricultural enterprises (total budget EUR 50 million)
    • a working capital loan to overcome liquidity problems caused by the COVID-19 spread outbreak (total budget EUR 100 million) or
    • land capital for farm owners for sale-and-leaseback transactions to overcome liquidity problems caused by the coronavirus outbreak (total budget EUR 50 million).

Enterprise Estonia Foundation services

Micro and small enterprises have the possibility to apply for support for partial compensation of a small entrepreneur’s damages caused by COVID-19 spread outbreak (total budget EUR 35 million). This will come into force in May 2020. The support is for micro enterprises whose 2019 yearly turnover was at least EUR 20,000 and at most EUR 100,000.

  • The amount of compensation for small enterprises whose 2019 turnover was between EUR 20,000 and EUR 40,000 is EUR 3,000.
  • The amount of compensation for small enterprises whose 2019 turnover was between EUR 40,000 and EUR 100,000 and whose turnover in March or April 2020 decreased by at least 30% in comparison to the turnover in the same month in 2019, is EUR 5,000.

In addition, since 11 May also housing, catering and tourism companies may apply for support from Enterprise Estonia Foundation.