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On 3 April, the Government of Luxembourg (Aaa stable) detailed support measures for companies negatively affected by the coronavirus pandemic. The government will provide companies and particularly small and midsize enterprises (SMEs) a loan for up to €500,000 to cover as much as 50% of eligible costs, which include salaries, social security and rent, and will defer repayment for 12 months. To the extent that the liquidity support for SMEs reduces business failures for this most vulnerable sector, the measures will mitigate deterioration of banks' asset quality and their credit losses.
The latest measures complement the broad €8.8 billion fiscal plan (or 12.5% of Luxembourg GDP) to provide liquidity support to businesses negatively affected by the nation's lockdown,...
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