April 3, 2020 / 9:47 AM / 2 months ago

UPDATE 2-Austria plans repayment moratorium on loans to consumers, small firms

* More measures under 38 billion euro aid package outlined

* Three million loans affected by repayment moratorium

* Guarantee for 90% of company loans up to 120 million euros

* Grants of up to 90 million euros available for fixed costs (Adds detail on aid being provided)

VIENNA, April 3 (Reuters) - Austria is introducing a repayment moratorium on loans to consumers and small companies hit by the coronavirus pandemic, Finance Minister Gernot Bluemel said on Friday, adding that the measure covers roughly three million loans.

Soon after Austria was effectively put on lockdown more than two weeks ago, the coalition government of conservatives and Greens announced a range of measures to try to keep the economy afloat, making up to 38 billion euros ($41 billion)available, roughly a tenth of last year’s economic output.

Despite measures including a scheme aimed at discouraging layoffs by enabling companies to keep staff on their books and only pay them for hours actually worked, unemployment last month shot up to its highest level since the data set began in 1946.

“If you have lost your job and therefore have a loss of earnings, or if you’re an entrepreneur and you have no revenue anymore, that is understandable,” Bluemel said when asked who would rule whether a loan qualifies under a reasonableness test in the text of the measure that parliament must still approve.

“Your bank will know that very quickly and that is what defines reasonableness, which must be checked by the bank as well,” he said, adding that he did not have a figure for the value of loans concerned.

Bluemel also outlined a programme under which the state will guarantee 90% of companies’ loans of up to 120 million euros or three months’ turnover, though that help comes with a one-year ban on dividend payments and a requirement that bonus payments to board members be “strictly limited”.

That assistance will come in the form of low-interest loans maturing in up to five years, with an option to extend by up to another five.

The aim is to prevent liquidity shortages. To qualify, a company must operate in Austria and need liquidity there. Being headquartered abroad is not a disqualifier, Bluemel said.

Alongside that measure, the state is providing grants of up to 90 million euros to cover part of firms’ fixed costs such as rent, electricity and phone bills, and perishable or seasonal goods whose value has fallen by at least half.

To qualify, a firm’s revenue must have fallen at least 40% and the company must have taken measures to preserve jobs.

Both measures are covered by a 15 billion euro fund that is part of the overall 38 billion euro package already announced.

$1 = 0.9251 euros Reporting by Francois Murphy; Editing by Nick Macfie and Andrew Cawthorne

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