Background information

Due to COVID-19 restrictions, certain enterprises have had to keep their premises closed. The restrictions have affected especially restaurants and other food and beverage businesses in large parts of the country. This has had a severe impact on their economy.

In order to support these enterprises, the Government pays compensation to restaurants and other companies shut down due to the COVID-19 pandemic. The legal basis is an amendment of the Act on Support for Business Costs (in Finnish Laki yritysten määräaikaisesta kustannustuesta) (508/2020).

Content of measure

During the first application round (May 2021), this compensation was available for small and micro-sized enterprises (1-49 employees). During the second application round (July - August 2021), large companies (over 50 employees) could also apply. The compensation is available for all types of businesses.

The amount of compensation depends on the costs the enterprise has had during the closure period and the extent to which the business has had to close down. 100% of salaries and 70% of other fixed costs are compensated. In the case of large companies, the sum is 70% of the difference between the costs and revenues during the closure period.

Enterprises that have received other forms of financial support can apply for closure compensation.

Closure compensation is administrated by the State Treasury.

Use of measure

According to the State Treasury's database , approximately 5,000 companies had applied for compensation as of 1 July 2021. In total €62 million had been paid out. A large majority of the compensation (around €48 million) had been paid out to restaurants and other food and beverage businesses.

As of 21 September 2021, approximately 6,000 micro and small companies had applied for this support. They had received approximately €97 million. In total 55 medium and large sized companies had applied for this support. They had received around €1.6 million.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Public support service providers	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Sectoral or branch level

Involvement

Due to the urgency of the proposal, there was not a regular consulting process. However, the sector-level employers' unions Mara ry (represents food and beverage sector and tourism) and Palta (represents the service sector) were consulted. On the employee side, trade union PAM was consulted. In addition, the Confederation of Finnish Industries EK (a peak-level employers' organisation) and the Federation of Finnish Enterprises and the Chamber of Commerce were consulted.

The partners are not involved in the implementation of this measure.

Views and reactions

Mara ry welcomes this measure but criticises the compensation for fixed costs (70%) for being too low. According to Mara, fixed costs should be compensated 100% since many companies cannot afford the remaining 30%.

PAM argues that closure compensation will not provide help for the already temporarily laid off employees. Instead of a form of support enterprises have to apply for afterwards, the Government should have created a form of subsidy that is available for the enterprises while the closure and other restrictive measures take place. This would diminish enterprises' need to temporarily lay-off their employees.

Sources

• 18 March 2021: Support for small and micro-enterprises would also offset wage costs. PAM's economist Olli Toivanen estimates that the support is too late for those who have already been laid off (www.pam.fi)
• 18 March 2021: Sulun aikaiset joustamattomat kulut korvattava täysimääräisesti – yritysten rahat ovat lopussa [fixed-term costs must be fully compensated during the closure - enterprises have no money] (www.mara.fi)
• 18 March 2021: Hallituksen esitys HE 37/2021 vp [Governmnt proposal HE 37/2021 vp] (www.eduskunta.fi)
• 06 April 2021: Closure compensation (www.valtiokonttori.fi)
• 18 June 2021: Draft bill out for comments: Another round of business cost support to open and new compensation for large companies under preparation (valtioneuvosto.fi)
• 21 September 2021: Tilastoja: Sulkemiskorvaus keskisuurille ja suurille yrityksille [Statistics: Closure compensation for medium-and large companies] (www.valtiokonttori.fi)
• 21 September 2021: Tilastoja: Sulkemiskorvaus mikro- ja pienyrityksille [Statistics: closure compensation for micro and small companies] (www.valtiokonttori.fi)