An overview of government measures responding to - COVID-19 28 March 2020
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An overview of government
measures responding to
COVID-19
28 March 2020
LIB01/CLAYRUSS/6654673.8 Hogan Lovells
-2- Contents UK 1 AS AT SATURDAY, 28 MARCH 2020 1 GERMANY 6 AS AT FRIDAY, 27 MARCH 2020 6 FRANCE 12 AS AT FRIDAY, 27 MARCH 2020 12 ITALY 19 AS AT FRIDAY, 27 MARCH 2020 19 POLAND 24 AS AT FRIDAY, 27 MARCH 2020 24 LUXEMBOURG 30 AS AT FRIDAY, 27 MARCH 2020 30 SPAIN 34 AS AT FRIDAY, 27 MARCH 2020 34 LIB01/CLAYRUSS/6654673.8
UK
As at Saturday, 28 March 2020
UK: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
Furloughed employees: The Coronavirus Extended Notice Suspension of Business No changes have been
Coronavirus Act 2000:
All UK employers with a Business Interruption Periods: Rates: Suspension of introduced at the time of
The government have the
PAYE scheme will be able to Loan Scheme ("CBILS"): Residential tenants business rates for those in writing; however, the
power to require a relevant
access support to continue Available to banks, lease have extra protections the leisure, retail and government confirmed on
entity within certain
paying part of their companies and other types in the form of extended hospitality sector for the 28 March 2020 that the
industries to provide
employees’ salary for those of lender. Where the notice periods required 2020-21 tax year. following measures would
necessary information on
that would otherwise have government will cover 80% before their tenancies be introduced at the earliest
whether their supply chain
been laid off during this of the lender's exposure to can be terminated; and Stamp Duty: opportunity applying
is being disrupted. The
crisis. HMRC will reimburse eligible SME borrowers STFs should only be retrospectively from the
80% of their wages, up to (SME means less than £45m
Any commercial tenant, beginning of March:
range of entities that may
sent by email to HMRC. be subject to this power is
whether in the retail
£2,500 per month for all annual turnover). The E-signatures are
and leisure sectors or Protection from wide, catching suppliers at
furloughed workers from government will also pay the accepted whilst such
otherwise, and no winding-up petitions: every point along the supply
the 1st of March 2020 first 12 months of interest measures are in place.
matter what their Directors would be able to chain before the product
onwards. This measure will and fees on behalf of the Payment of stamp duty
financial position, is file a "COVID-19 reaches the consumer,
be in place for up to 3 borrower. CBILS is an must be made
now protected until the Declaration" stating that the although individuals, like
months initially but may be extension of the EFG electronically (using
end of June from the company was facing a sole traders and some
extended if necessary. (Enterprise Finance Faster Payment, BACS
risk of its lease being temporary liquidity or farmers, are not in scope.
Guarantee) scheme which or CHAPS) and details
terminated (by operational challenge as a
It is unclear whether this has been running since of the transaction must
forfeiture) for non- consequence of COVID-19.
HMRC grant is also 2009 (www.british- be sent to HMRC by
payment of rent. That would start a 90 day Competition Law
intended to cover an business- email (at the address period running. During that relaxation: The
employer's NICs liability. If bank.co.uk/ourpartners/cor above) rather than by
However, it is important to time (a) the company could government are allowing
it is, the net payment to onavirus-business- post. Payments by
note that: not be deemed to be unable supermarkets to work
employees will be less than interruption-loan-scheme- cheque will not be
1. any rent sums to pay its debts under the together to feed the nation
80% of their usual wages. cbils). Its use by portfolio banked until the
(including the March cash flow test for the during the 2019 novel
The position in relation to companies in private equity temporary measures
quarter) that fall due purposes of a creditor coronavirus disease
pension contributions for funds continues to be end (so HMRC will not
during this period are winding up petition (it is not outbreak (COVID-19),
furloughed employees is not debated (some lenders process the transaction
not waived or proposed to change the elements of competition law
dealt with in the current arguing the £45m turn over even if it has received
postponed, it is just the balance sheet test as the will be temporarily relaxed
government guidance. We threshold should be the details by email).
right to forfeit that is measures are designed to for the food sector.
will update this note as aggregated across portfolio-2-
UK: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
further information companies in a fund). postponed until after Deferred VAT address short term liquidity
becomes available. 30 June; Payments: VAT payments issues not more significant The CMA will issue more
Interest Rate Cut: The 2. it is unclear whether shall be deferred for the capital issues); and (b) any guidance on this in due
Grant to self-employed Bank of England cut interest 'rent' in the legislation next quarter (i.e. up until petition would be invalid course but has issued a
workers: Self-employed rates to 0.1% and have means principal rent, the end of June without the approval of the preliminary statement
workers are able to apply for increased its holdings of UK sums reserved as rent 2020). Businesses will have court. warning traders not to
a grant equivalent to 80% of government and corporate (which will often until the end of the current exploit the coronavirus
Moratorium: directors
their average monthly bonds by £200 billion to a include service charge) financial year to make any outbreak to take advantage
would be able to file for a
profits up to a maximum of total of £645 billion. or all regular payments deferred payments (Noted of people.
moratorium similar to an
£2,500 a month. This will due under a lease such in the Chancellor of
administration interim
only be open to those with a Contingent Term Repo as insurance. At Exchequer's speech on 20th
moratorium if directors
trading profit of less than Facility: The Bank of present, a cautious March 2020).
have an intention to put in
£50,000 in 2018-19, or an England has announced the approach that business
Deferred self- place measures to overcome
average trading profit of less activation of the Contingent tenants can take is
assessment income tax a temporary COVID-19
than £50,000 from 2016-17, Term Repo Facility prioritising paying all
payments: Deferring related liquidity crisis in
2017-18 and 2018-19. (“CTRF”). The CTRF is a sums other than
upcoming self-assessment order to avoid insolvency or
flexible liquidity insurance principal rent, as
income tax payments for to appoint an administrator
Statutory sick pay aid tool that allows participants principal rent is the
self-employed persons (due with a view to being rescued
scheme: Government aid to borrow central bank only payment that is
on 31 July 2020 to January as a going concern.
scheme to reimburse small/ reserves (cash) in exchange undoubtedly captured
2021 (Noted in the
medium employers (less for other, less liquid assets by the legislation. Wrongful trading: The
Chancellor of Exchequer's
than 250 employees) for the (collateral). Equally, should a law would be changed so
speech on 20th March
cost of coronavirus related tenant withhold all that a director would not be
2020).
SSP. Covid Corporate sums due under their made liable for wrongful
Financing Facility: HM lease, it is trading if, acting reasonably,
Coronavirus Bill 2019- Treasury and the Bank of recommended that he misjudge the potential
21: Temporary suspension England have designed a landlords avoid negative impact of the crisis
of the requirement for webpage setting out the forfeiting until the on the business.
waiting days, which practical steps that a firm position has been The UK government
ordinarily means that SSP is needs to take in order to clarified by the confirmed that
not payable for the first access the Covid Corporate government;
three days of sickness Financing Facility (“CCFF”) 3. interest will continue to
absence. This will apply and a number of FAQs on accrue, and sums other
retrospectively from 13 the scheme. than rent will need to
March 2020. be paid to avoid the risk
Relaxing of operating of forfeiture; and
obligations for PRA- 4. landlords will still have
regulated institutions: other remedies
The Bank of England and
LIB01/CLAYRUSS/6654673.8 Hogan Lovells-3-
UK: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
the PRA have announced available to them
measures aimed at including serving a
alleviating operational statutory demand prior
burdens on PRA-regulated to a bankruptcy or
firms and Bank-regulated winding up petition,
financial market issuing court
infrastructures including: proceedings for
Cancellation of the payment or taking steps
Bank’s 2020 annual to take control of a
stress test – the annual tenant's goods under
cyclical scenario (ACS). the Commercial Rent
Amendments to the Arrears Recovery
biennial exploratory Regime (CRAR)
scenario (BES) regime. However, given
timetable and the lockdown that has
postponement of the been announced, it may
joint BoE and FCA be difficult to exercise
survey into open ended CRAR as the premises
funding. in question should be
closed.
The PRA has provided
guidance to lenders on how Lockdown: Retail, hotels,
they should respond to hospitality, and leisure
covenant breaches related to services went into lock down
Covid-19, as follows: on 23 March 2020. Broadly,
only supermarkets and
“[The PRA] would other food shops,
expect lenders to pharmacies, vets, hardware
consider the need to stores, petrol stations,
treat [covenant banks, post offices,
breaches that arise laundrettes, and premises
from Covid-19 related hosting food banks or
matters that are of a homeless services are
general nature or are designated essential and are
firm-specific but allowed to remain open.
unrelated to the
solvency or liquidity of
the borrower]
differently compared to
LIB01/CLAYRUSS/6654673.8 Hogan Lovells-4-
UK: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
uncertainties that arise
because of borrower-
specific issues and in
doing so consider
waiving the resultant
covenant breach. [The
PRA] would expect
firms to do so in good
faith and not to impose
new charges or
restrictions on
customers following a
covenant breach that
are unrelated to the
facts and
circumstances that led
to that breach.”"
Joint statement by the
FCA, FRC and PRA: The
FCA, FRC and PRA issued a
joint statement on 26 March
2020 announcing a package
of actions, including:
A statement today by
the FCA allowing listed
companies an extra 2
months to publish their
audited annual
financial reports.
Guidance from the
FRC for companies
preparing financial
statements in the
current uncertain
environment. This is
complemented by
guidance from the
PRA regarding the
LIB01/CLAYRUSS/6654673.8 Hogan Lovells-5-
UK: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
approach that should be
taken by banks,
building societies and
PRA-designated
investment firms in
assessing expected loss
provisions under
IFRS9.
Guidance from the
FRC for audit firms
seeking to overcome
challenges in obtaining
audit evidence.
Source: HL Client Note:
FCA, FRC, PRC and
ESMA announce
measures to alleviate
impact on listed issuers
and their auditors in
response to COVID-19
LIB01/CLAYRUSS/6654673.8 Hogan Lovells-6-
Germany
As at Friday, 27 March 2020
Germany: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
Improved access to German state aid New Debtor protection Direct and indirect Suspension of the
short-time work schemes to support the under lease agreements: taxes: obligation to file for
allowance: German economy and This is applicable to both, insolvency until 30
Taxpayers who can prove to
businesses’ liquidity: private and commercial September 2020: The
Short-time work be directly and not
tenants. It prohibits the obligation of a company's
allowance KfW measures: inconsiderably affected may
landlord from terminating a management to file for
(Kurzarbeitergeld) can submit applications for
Conditions for existing KfW lease agreement due to the insolvency in case of
be granted to employes deferral of taxes (in
programmes (“KfW tenant failing to pay rent illiquidity
on a more flexible particular covering Income
Unternehmerkredit” for due between 01 April until (Zahlungsunfähigkeit) or
basis. Government Tax, Corporate Income Tax
companies existing for more 30 June 2020 as a result of over-indebtedness
measures have made it and VAT for previous years–
than 5 years) and “ERP- the COVID-2019. For this (Überschuldung) will in
easier for companies to initially deferral for 3
Gründerkredit-Universell” purpose, the tenant must general be suspended until
obtain state benefit for months; extended if
for start-ups loans for provide credible evidence of (for the time being) 30
this as the threshold of necessary) as well as
businesses less than 5 years the connection between the September 2020. No
one third of the applications for adjustment
old) have been loosened. pandemic and his non- suspension will be available,
workforce affected by of advance payments of
The instrument has been performance. if the insolvency did not
the work shortage has income and corporation tax
opened for larger companies result from the COVID 19
been lowered to 10%. The law particularly until 31 December 2020
as turnover thresholds have pandemic or if there are no
The German emphasizes that tenants do (based on the estimated
been lifted. reasonable prospects that
government will cover not have the right to refuse annual result). Interest on
the company's illiquidity can
payment of social The KfW loan programme performance and that deferral can generally be
be eliminated until 30
security contributions covers up to 90% of the risk tenants and landlords waived. Requests for
September 2020.
for the employees as if for loans for companies of remain obliged to perform; deferral of taxes due after 31
they were employed on all sizes. therefore, even if the December 2020 and The insolvency law related
their regular working landlord is prohibited to requests for adjustment of measures came into effect
time. The maximum principal has terminate, a deferral of the advance payments relating (retroactively) on 1 March
been increased to up to EUR rent is explicitly not only to periods after 31 2020.
1bn. Risk assumptions by foreseen as the landlord's December 2020 must be
KfW total up to 80% for For companies which have
Compensation for claim to payment continues specifically justified.
not been illiquid on 31
LIB01/CLAYRUSS/6654673.8 Hogan Lovells-7-
Germany: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
parents who must stay large /larger companies and to arise and remains due December 2019 it will be
at home to take care of up 90% for small for (including any default assumed (such assumption
children: The state is medium size enterprises as interest on arrears). being rebuttable only in
offering compensation to defined in Annex I of EU exceptional cases) that the
Currently, various
these employees who must Commission Regulation EU insolvency was caused by
approaches for mutual
stay home to take care of 651/2014. the COVID 19 pandemic
agreements on rent
their children due to school and that there are
Interest levels may be deferrals or even waivers,
and kindergarten closures reasonable prospects for
enhanced between 1.00 – can be observed in the
in Germany. eliminating illiquidity.
1.46% for small or medium- market, e.g. the additional
Possibility to defer sized businesses and payment of deferred rent in
Exclusion or limitation
payment of social between 2.00– 2.12% for instalments (limited period
of the right of creditors
security contributions larger businesses. / total remaining term),
to file for insolvency:
without interest: agreements on additional
The application processes A third party's application
Employers who are unable revenue or profit rent
have been eased depending for the opening of
to pay social security components, the extension
on the size of the loans. insolvency proceedings will
contributions due to the of the fixed term of the lease
KfW also offers direct only be admissible if the
Covid-19 epidemic can apply agreement as well as the
participations in syndicated debtor was insolvent before
to the competent statutory advance / extraordinary
loans “Direktbeteiligung für 1 March 2020.
health insurance for a indexation of the rent. All
temporary deferral of said Konsortialfinanz-ierungen” solutions are mainly aimed
at pari passu terms and Lifting of payment
contributions for the at finding amicable
assumes risks of up to 80%. prohibitions in the
months of March, April and solutions, as both
event of insolvency:
May. As an exception to the Measures for guarantee contracting parties should
Generally the management
regular rules, no interest banks have a substantial interest in
is personally liable for
shall become due for the (Bürgschaftsbanken): the continuation of the hotel
payments which are made
deferred payments which lease agreement after the
increase of guarantee after the company has
will become due in June crisis.
limit to EUR 2.5mn become illiquid or over-
2020.
Due to the federal system in indebted. Such "payment
the Federation will
Germany, the single states prohibitions" will be lifted
increase its share in the
have issued different as far as:
risk in guarantee banks ordinances and/or general 1) the obligation to file for
by 10% rulings. Therefore the insolvency is suspended
increase of the situation and applicable (see above); and
maximum limit of 35% laws vary from federal state 2) the payments serve to
of operating resources to federal state and maintain and resume
in guarantee banks’ sometimes even from city to business operations or
total exposure to 50%
LIB01/CLAYRUSS/6654673.8 Hogan Lovells-8-
Germany: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
authority to make city and need to be assessed to implement a
guarantee decisions up in every single case. restructuring plan.
to EUR250,00 Lockdown: Overall, only
independently and premises for the necessities
within a period 3 days of daily living are allowed to
Guarantee program for be open; such as
companies in supermarkets and other
structurally weak food shops, pharmacies,
regions: The German state vets, petrol stations, banks,
covers operating loans and post offices, laundrettes,
investments with a surety and premises hosting food
requirement exceeding EUR banks or homeless services.
50mn and a guarantee rate of
up to 80%.
Economic Stabilisation
Fund
(Wirtschaftsstabilisier-
ungsfonds, WSF):
German Bundestag and
Bundesrat approved of the
establishment of an
economic stabilization fund
with a view to ensuring
liquidity of German
companies that were sound
prior to the COVId-19 health
crisis.
The WSF complements the
aforementioned KfW
measures and includes the
following instruments:
guarantee
framework of
EUR400bn to assist
companies to
LIB01/CLAYRUSS/6654673.8 Hogan Lovells-9-
Germany: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
refinance
themselves in the
capital markets
(bridge to liquidity
shortfalls)
authorisation to
grant credit of up to
EUR100bn for
capitalization
purposes
(strengthening of
thw capital of the
companies,
recapitalization)
further
authorisation to
grant credit for
EUR100bn for the
refinancing of the
KfW special
programs
WSF may:
grant guarantees
for bonds and
other liabilities
purchase shares or
other forms of
equity
grant subordinated
debt or other forms
of hybrid capital
The Federal Government
will be raising additional
funds on the capital markets
to finance these measures.
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 10 -
Germany: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
Only companies from the
real economy that met at
least two of the three criteria
before 1 January 2020 are
eligible for stabilization
measures:
total assets
exceeding
EUR43mn
turnover exceeding
EUR50mn
more than 249
employees on
annual average
Changes with regard to
claw-back rules, the
provision of
restructuring loans and
shareholder loans:
New loans which have
been granted within the
suspension period (i.e.
until 30 September
2020) the provision of
collateral and the
repayment of such
loans until 30
September 2023 will
not be subject to claw-
back law.
The same applies for
the repayment of newly
granted shareholder
loans. For such new
shareholder loans the
statutory subordination
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Germany: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
will be lifted if an
insolvency filing has
been made until 30
September 2023.
Granting restructuring
loans to companies
affected by the COVID
19 pandemic will not be
regarded as immoral
lending or delaying the
company's insolvency.
Congruent and certain
incongruent
transactions which are
carried out during the
Suspension periods will
not be subject to claw-
back law, unless the
other party knew that
the debtor's financing
or restructuring efforts
were not suitable to
eliminate the debtor's
illiquidity.
Source: HL client note:
New regulations to mitigate
consequences of the COVID-
19 pandemic in Germany
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 12 -
France
As at Friday, 27 March 2020
France: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
Payment deferral of
Partial activity (Decree Measures by the Public Micro-enterprises: The This below reforms will Relaxation of the rules
direct taxes: Companies,
of 26 March 2020): Investment Bank: French government has apply until the expiry of a applicable to the
other businesses and self-
Amendment to an suspended the payment of period of three months after performance of public
The French Public employed individuals can
employee's role can be rents and charges falling due the date of cessation of the contracts: Contracts which
Investment Bank (BPI) has ask, without any specific
implemented under certain between 12 March and 24 state of health emergency: would be compromised as a
announced that it will condition to be fulfilled, a
specific circumstances July 2020 (subject to result of the COVID-19
guarantee up to 90% of the deferral (up to 3 month) of 1) The state of cessation of
where the continuity of the possible extension) for epidemic, in order not to
amount of eligible loans the payments of direct taxes payments shall be
company's activity is at enterprises with less than 10 penalise economic operators
taken out by companies with (such as corporate income assessed taking into
stake. employees and 2 million in and to allow the continuity
their credit institutions. This tax, but not VAT or payroll consideration the
turnover. of these contracts (Order No.
guarantee is accessible to tax) and certain local taxes situation of the debtor
Process: The possibility to 2020-319 of 25 March 2020
companies which satisfy These micro-enterprises (land tax, “CFE”-tax) due in on 12 March 2020.
implement this scheme has (only available in French) on
several criteria. cannot incur any sanction March.
to be requested online to the various measures to adapt
such as late interest, Consequently, if, on 12
Labour Administration. The BPI has indicated that it the rules for procurement,
penalties, termination and Rebate of direct taxes: March, the debtor was
would extend its standard procedure or execution of
so on. Companies, other businesses not in a state of
In principle, employers have guarantees over investment contracts subject to the
and self-employed cessation of payments,
to inform and consult loans without charging any This is a rent freeze rather French Public Procurement
individuals (which are but such a state has
Economic and Social management fees. than a rent free period. Once Code and public contracts
otherwise in good standing) arisen during the period
Committee ("CSE") (if any) this time has expired the not covered by it during the
The BPI has indicated that it facing severe difficulties can of health crisis, it
prior to making a request parties will need to negotiate health crisis caused by the
would support companies' also request direct tax cannot be assigned to
for use of this scheme. As an how these rents and charges Covid-19 epidemic)
maintaining cash flow by rebates. judicial reorganization
exceptional and temporary will be paid, rescheduled,
directly providing fresh (“redressement Tourist travel and
measure in the current postponed. Subsidy for certain
liquidity, through: (i) judiciaire”) or judicial holiday contracts:
context, employers are granting medium-term loans The government has also SMEs: SMEs having a
liquidation. Modification of the
allowed to inform and with no security interests introduced a freeze on the turnover below €1m and
obligations of tourism
consult their CSE within a (Prêt Atout) for a limited payment of which either: (i) are closed
The debtor can always professionals, whether
maximum of 2 months maturity and for certain electricity/gas/water bills to as a result of an
apply for the opening of organisers or retailers, to
following the request made eligible companies, with a the benefit of the same administrative decision; or
judicial reorganization enable them to offer their
to the Administration. (ii) face a decrease of their
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France: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
deferred principal businesses. turnover in March 2020 of or liquidation customers, for a fixed and
The Labour Administration repayment of 6 to 12 more than 70% compared to proceedings if its state limited period of time, a
Middle-sized businesses:
has 48 hours to instruct the months; such loans must be March 2019, can request a of cessation of refund of their trip or stay in
The main professional
request, it being noted that associated with a bank loan €1,500 subsidy. payments occurred the form of an identical or
organisation representing
in case the Administration (which can be counter- during the health crisis. equivalent service offer, or
landlords in France have
remains silent, the request guaranteed by BPI), (ii) the The debtor may also in the form of a credit note
expanded these measures to
is considered as accepted. factoring of all invoices request the opening of valid for 18 months (Order
cover up to 250 employees
together with a credit line safeguard proceedings, No. 2020-315 of 25 March
and 50 million turnover.
NB: the Labour representing 30% of the even if his state of 2020 (only available in
These measures include:
Administration tends to amount being factored and cessation of payments French) on the financial
restrict the possibility to use (iii) the granting of loans to 1) Suspension of payment occurred between conditions for terminating
this scheme (No systematic certain eligible companies, of rents and charges as March 12 and the date certain tourist travel and
partial activity measure, co-financed by local from 1st April until the of the request. holiday contracts in the
rejection of applications as a authorities for a limited end of the lockdown event of exceptional and
preventive measure from maturity, with a duration of period, at least for 2) With regard to ongoing unavoidable circumstances
Labor Administration in Île- 7 years, including 2 years of businesses forced to conciliation proceedings or force majeure).
de-France, control a deferred principal close as part of the - The duration of
Electricity, gas and
posteriori). repayment, for an amount lockdown. ongoing conciliations is
water: In order to prevent
ranging from EUR 10,000 to 2) Negotiating the terms of automatically extended
Duration: this scheme can and limit the cessation of
EUR 300,000. payment without any until three months after
be implemented for a activity of micro-enterprises,
sanction against the the date of cessation of
maximum of 12 months, Subject to reasoned request, the ordinance prohibits, the
tenants; the state of health
renewable in certain BPI will automatically suspension, interruption and
For the other enterprises not emergency.
circumstances. postpone the payments of its reduction of the supply of
loan (principal and interest) subject to a lock down, electricity, gas and water to
landlords are invited to 3) It is possible to open a
Compensation: under this and property leasing, for a these companies, and
negotiate on a case by case new conciliation
scheme, the compensation period of 6 months, without provides, if they so request,
basis. proceedings
process is the following: any administrative fees. for the payment of the
immediately following
No rent free period has corresponding bills to be
Measures by the French the failure of a first
Each employee government: The French been introduced or decided staggered over time, without
conciliation procedure.
impacted by the partial - It is a matter of penalty.
government has announced
activity mechanism the creation of a global negotiation between the Penalties: In order to
4) The judicial
shall receive an hourly envelope of EUR 300 billion parties. prevent and limit the
representative
allowance paid by the to guarantee new loans cessation of activity of
(“mandataire
employer to compensate granted by banks to micro-enterprises, the
judiciaire”) may
the salary loss. This businesses affected by the Lockdown: The French ordinance prohibits, the
immediately send the
hourly allowance should consequences of the Covid- Government ordered a application of financial
statement of salary
represent at least 70%
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France: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
of the employee's gross 19 epidemic. This direct shutdown of any claims to the AGS, in penalties, damages, the
hourly salary (except in guarantee issued by the establishment receiving order to enable the enforcement of resolutory or
case the applicable State is added to the public (except for those latter to take over the penalty clauses or the
National Collective guarantee schemes deemed essential) until payment of salaries, activation of guarantees or
Bargaining Agreement implemented by BPI 15 April 2020. without being required sureties, due to the non-
or a company-wide described above. to submit this statement payment of rent or rental
Essential establishments are
agreement provides to the employees' charges relating to the
Except for civil property notably food shops
otherwise), it being representative professional and commercial
companies and credit (including wine/alcohol
specified that beforehand or to premises of these
institutions or finance shops), gas stations,
employees paid at the request the prior companies.
companies, companies from car/moto shops (repair
legal minimum wage approval of the official
all economic sectors are shops, equipment shops,
should receive 100% of receiver.
eligible to benefit from these etc.), computer/phone shops
their salary;
loans guaranteed by the (including repair shops),
The employer should State. hardware shops, hotels,
5) The duration of the
receive from the French safeguard and
banks, insurance, laundry
State an allowance reorganization plans
The State direct guarantee services and funeral services.
amounting to 70% of (“plans de
only concerns loans granted
the hourly redressement”) may be
by banks to companies
compensation of the extended until the
affected by the Covid-19
employee, calculated on expiry of a period of
crisis in order to meet their
the basis of three months following
cash flow needs. These loans
compensation taken the date of cessation of
are one-year cash loans
into consideration for the state of health
(which can be further
paid holidays within the emergency; the Public
extended for another five
following limitations: Prosecutor's Office may
year). Their amount is
minimum of €8.03 per request that this
limited and the threshold of
unworked hour, and extension be for one
the guarantee depends on
maximum 4.5 times the year.
the number of employees
legal minimum salary and turnover of the
(e.g. approx. € 6,900 6) The president of the
company. These will be
gross per month for a insolvency court may
commercialised by the banks
full-time job). extend the time limits
as from 25 March 2020 until
imposed on the court-
the end of the year. The cost
appointed
of these loans will only
Possibility to force administrator
consist of (i) the cost of
employees to take paid (“administrateur
financing specific to each
holidays/RTT days judiciaire”), the judicial
bank (interest rate), without
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 15 -
France: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
(Order of 25 March margin and (ii) the cost of representative
2020) under the the State guarantee. (“mandataire
following conditions: judiciaire”), the
The State has delegated the liquidator and the
For paid leave:
monitoring and commissioner for the
Entering into a administrative management execution of the plan, at
company-wide related to such guarantee to their request, until the
agreement or a BPI. While the smallest expiry of a period of
national-wide collective companies will have to turn three months following
agreement; to BPI, the larger companies the date of cessation of
Limited to 6 forced days will have direct contact with the state of health
of working holidays the Ministry of Economy emergency.
which cannot be and Finance.
imposed/modified 7) In judicial
beyond 31 December reorganization
2020; and (“redressement
Complying with a judiciaire”), the
minimum notice period requirement for a
of one day. hearing ruling to be
handed down within
two months of the
For RTT days accrued by the opening judgement on
employee (including if they the maintenance of the
are in a company saving observation period is
time account –"CET"): abolished.
limited to 10 days which
cannot be 8) The periods relating to
imposed/modified the observation period,
beyond 31 December the plan, the
2020; maintenance of activity
Complying with a and the duration of the
minimum notice period simplified judicial
of one day. liquidation are
automatically extended
Possibility to derogate to until the expiry of a
legal working time period of three months
(Order of 25 March following the date of
2020): Companies which
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 16 -
France: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
carry out an activity required cessation of the state of
for national security or the health emergency.
continuity of economic and
social life are entitled to 9) The periods within
derogate to public policy which dismissals must
rules on working hours, be implemented in
weekly rest and Sunday rest order to benefit from
until 31 December 2020: the AGS guarantee have
Maximum daily been extended until 3
working time increased months following the
to 12 hours (instead of date on which the state
10); of health emergency
Maximum night comes to an end.
working time increased
to 12 hours (instead of 10) A debtor may seek
8), subject to a approval not to appear
compensatory rest at a hearing. The court
equivalent to the hours may require the plaintiff
worked over the normal to attend by other
night working time; means if required
Daily rest decreased to 9 though.
hours (instead of 11),
subject to compensatory 11) Communications
rest equal to the between the clerk of the
duration of the rest court, the court
from which the administrator and the
employee has been judicial representative
deprived; as well as between the
Weekly working time organs of the
has been increased to proceedings make take
60 hours (instead of place by any means
48); besides attending in
Weekly working time person.
over a 12-week period
has been increased to 12) Agricultural
48 hours (instead of amicable settlement
44); procedure:
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 17 -
France: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
Weekly working time A judge may not refuse
for night worker over a to appoint a conciliator
12-week period on the grounds that the
increased to 44 hours debtor's situation
(instead of 40); worsened after 12
Possibility to grant the March 2020;
weekly rest to the It must be possible to
employees by rollover establish an agreement
on Sunday (instead of even if it does not put
compulsory Sunday an end to the cessation
rest). This possibility is of payments, if the
also opened to the cessation of payments is
services providers used due to an aggravation of
by the Companies the debtor's situation
Companies using these after 12 March 2020
derogations are required to
immediately inform their
Social and Economic
Committee and the Labour
Authority (DIRECCTE).
A Decree shall define the list
of the companies entitled to
those derogations.
Implementation of
specific sick leave: A
specific sick leave has been
implemented for parents of
children who are: (i) 16 years
old or younger; and (ii)
impacted by the schools
closure; if remote work is
not possible for them, these
employees may take a sick
leave and receive
compensation as if they were
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 18 -
France: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
sick, with no notice period.
Postponement of the
deadline for payment of
the employee savings
scheme (Order of 25
March 2020): The
deadline for the payment of
the profit-sharing and
optional profit-sharing
schemes (which is normally
on 1st June 2020) is
postponed to 31 December
2020.
Payment deferral of
social security
contributions: Companies
have the possibility to defer
all or part of the payment for
up to 3-months without
applying penalties.
Extension of the validity
of periodic medical
examinations to 30
months
Residence permit: Those
expiring between March 16
and May 15, 2020 shall have
their residency permit
extended for up to 90 days.
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 19 -
Italy
As at Friday, 27 March 2020
Italy: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
Moratorium for early
The following special funds Lockdown: Commercial Time to pay debts: At this stage, the Italian No specific measures have
Red Zone: By order of the
are applicable in case of total activities to the public went Government has not still been introduced for specific
Presidency of the Council of Enterprises and
or partial suspension of the into lock down starting from adopted specific legislative contracts to address the
Ministries (the "Order"), professionals (i) involved in
work activity due to COVID- 11 March 2020 until 3 April decrees to regulate the economic and social
borrowers may request a the sectors most affected by
19 emergency, for maximum 2020 (unless such term is impact of the COVID-19 consequences of the COVID-
moratorium (up to twelve Covid-19 pandemic (e.g.
9 weeks, to refund – in part further postponed with emergency on the insolvency 19 outbreak.
months and at no additional accommodation facilities,
(up to 80%) – the salary of further decrees) – with the proceedings.
cost or charge) on principal travel agencies, restaurants, Notwithstanding the above,
not working employees in only exclusion of essential
and interest payments on bars and pubs, etc.) or (ii) That being said, COVID-19 in order to evaluate the
force since 23rd February and first necessity activities.
loans for property and whose revenues did not shall have a strong impact impacts of the Covid-19
2020:
businesses located in the Some regions have issued exceed EUR 2 million in on pending insolvency related events on the
1) Redundancy fund Municipalities of Bertonico, special and more restrictive FY2019 can benefit from a proceedings, most notably: agreements with Italian
("CIGO") or ordinary Casalpusterlengo, measures in relation to postponement to 31 May suppliers, it is first of all
1) in a liquidation
cheque: a special CIGO Castelgerundo, Castiglione certain activities. 2020 of certain payments necessary to verify
scenario, the related
(mainly available to D'Adda, Codogno, Fombio, due on March and April whether/what is stated in
At the moment, there are no (judicial and voluntary)
industrial - or similar - Maleo, San Fiorano, 2020 the contract at stake in
provisions allowing procedure for the
companies with more than Somaglia and Terranova dei relation to what is meant by
suspension or postponement company assets sale is
50 employees) has been Passerini in Lombardy, and The activity of collection of “force majeure” and/or if a
of the payment of the rent. suspended; and
made available to be used Vo' in Veneto (the "Red tax and non-tax related definition of "rebus sic
Free rent periods or 2) in a going concern
only in the period 23rd Zone"). If the banks do not payments due towards stantibus" or a similar
postponements of the scenario, the business
February - 31st August publish another Public Authorities has been concept is therein provided
relevant payments may continuity of company
2020; rescheduling plan within 30 suspended and/or if the relevant
nevertheless be negotiated may be jeopardized by
days of publication of the consequences are therein
2) Additional by the parties. Suspension of tax the lock down of any
Order, there will be a regulated.
Redundancy fund, so- fulfilments: With respect commercial/industrial
payment suspension on their Force Majeure: The
called “in deroga” to all taxpayers, any tax activities provided by Productive activities:
loans until 14 November Covid-19 pandemic may be
rovided by the Regions fulfilment due in the period the decrees. From 22 March 2020 until
2020 qualified as a “force
or Autonomous from 8 March 2020 to 31 15 April 2020 (unless such
majeure” event, and one
Provinces ("CIGD"): This May 2020 – other than (i) term is further postponed
SME Protection Fund should look whether a “force
is available for employers the payment obligation, (ii) with further decrees), all
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 20 -
Italy: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
which cannot benefit from and First-Home majeure” clause is included the levy of withholding taxes productive activities are shut
other subsidy plans. Protection Fund: Small in the relevant lease and regional and municipal down, with the express
and medium enterprises agreement. If no clear surtaxes – has been exclusion of those
To enjoy of the above
(SMEs) based in the Red regulation on “force postponed to 30 June 2020, specifically listed in the
subsidies, employers need to
Zone, may apply (for twelve majeure” is provided in the without any sanction being relevant law decree.
follow simplified and shorter
months from the publication lease, evaluations have to be due
Unions consultations (which Some Regions issued special
of the Decree) to their bank made on a case-by-case
last three days and can be Tax credit for costs and more restrictive
lenders for support through basis, taking also into
carried out electronically) borne to sanitize the measures in relation to
the SME Protection Fund account whether the
and administrative workplace: for the year certain activities. For
(Fondo di garanzia per le relevant activity was subject
procedures. 2020 a tax credit equal to additional information in
PMI) in the form of a to a complete or a partial
50% of the cost of this regard, please refer to
However, State/regional guarantee or reinsurance for lockdown. Tenants may have
sanitization is granted, the “Real Estate” section.
funds currently allocated for their loans, respectively, up some grounds to ask for a
within a cap of Euro
these subsidies are limited. to 80% of the amount of the reduction or, in particular
20,000.00 for each Force majeure: If no
loan and 90% for circumstances, a suspension
employer. (clear) provisions are
reinsurance. The Decree also of the payment of the rent
Special authorised Conversion of DTA into included in the contract,
established a moratorium up or, also depending on the
absences of the reference has to be made to
to eighteen months for first- duration of the “force tax credit: any DTA, even if
employees (not working the general principle of
home residential loans to majeure” event. not reported in the financial
from home and not Italian law on the force
borrower who have their statements, relating to
benefiting of any social Tenant Right to majeure. In this respect,
employment suspended or carried forward tax losses
program) under the Withdraw: Tenants have a Italian law does not provide
reduced for 30 days or more (art. 84 Italian Corporate
COVID-19 emergency: right to withdraw from the for a definition of what is
Tax Code) and carried
agreement at any time in meant by “force majeure”.
Special parental leaves Cura Italia Decree. This forward notional interest
the presence of serious The concept is indirectly
has been granted to has added: deduction benefit ("ACE",
grounds by sending a defined in different
employees with children: i. The possibility for all art. 1 of Law Decree 201 of
registered letter with at provisions of the Italian Civil
micro-enterprises or 2011), may be converted into
up to 12 years old (the least six months' notice Code ("ICC") and is guided
SMEs (MSMEs) tax credit by companies
age limit does not apply unless this was expressly by Italian case law.
based in Italy and suffering bad debts (overdue
in the case of children excluded by the parties in
impacted by for more than 90 days)
with disabilities) can the agreement (derogation
COVID19 to postpone subject to their assignment
benefit from 15 - is possible only for
their interest and to third parties. The
continuous or split – agreements having an
principal payments conversion is allowed for an
days of leave at 50% of annual rent higher than
until 30 September amount equal to 20% of the
their salary. This leave Euro 250,000). Courts have
2020. For the same nominal value of the
is also extended to always been quite reluctant
term, lenders are assigned bad debts (within a
members of the INPS to recognize withdrawal for
prevented from cap of Euro 2 billion)
serious grounds though
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 21 -
Italy: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
Gestione Separata (i.e. a cancelling credit and, so a right to terminate
Separate Account held facilities committed under the above provision
Financial measures for
by INPS). Alternatively, to MSMEs. Affected needs to be evaluated on a
medium/small
the employee can lenders may however case by case.
enterprises to safeguard
request a "babysitter apply for a guarantee
the level of employment
bonus" for a maximum covered by the SME
prior to Covid-19.
of 600 euros; Protection Fund, for
From 12 to 16 years old, up to 33% of the
who can benefit of further credit drawn
unpaid leave for the during the freeze, or
entire duration of the 33% or the interest or
school closures principal payments
(currently until 3rd extended or
April but probably postponed;
extended). ii. further strengthening
and flexibility to the
SME Protection
Additional paid permits Fund, especially in
(at charge of the the real estate and
National Social Security hotel tourism sectors;
Institute/INPS) for iii. creation of an Agri
employees who take care and Fishing Fund to
of a disabled family support businesses in
members – In March and the agriculture and
April 2020 such employees fishing sectors to
can enjoy an additional 15 bear the cost of
days of paid leave (in interest on loans and
addition to the 3 monthly credit facilities in the
ordinary days of leave). last two years; and
iv. possibility for the
Other absences of
State through Cassa
employees: The absence of
Depositi e Prestiti
an employee who is under
S.p.A. to guarantee
quarantine or precautionary
the banks' risk
home-stay if they:
exposures to
1) tested positive for businesses affected
COVID-19 test; or by COVID19 which
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 22 -
Italy: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
2) had close contact with are not eligible for
someone who resulted coverage through the
positive to the test; or SME Protection
3) lives/comes from areas Fund.
at epidemiological risk,
Extended Credit
shall be treated as paid
Support: The Italian
sickness (at charge of the
Banks' Association (ABI)
State) for the purposes of
has agreed with the main
economic treatment, and
business Associations to
shall not be counted within
extend the credit support
the so-called "comporto"
under the existing 'Accordo
(i.e. the period during which
per il Credito 2019'
the employee is entitled to
programme to MSMEs
maintain his/her job even
affected by COVID-19 for
though on sickness leave).
loan agreements entered
Bonuses payable to into until 31 January 2020.
employees: Employees This program allows the
(whose total income does eligible borrower to require
not exceed Euro 40,000.00) a moratorium of up to
shall receive a not taxable twelve months (for medium
bonus of Euro 100 pro-rated and long term financings),
with respect to the days they or an extension in
carried out their activity at repayment plan for up to
the workplace in the month 100% of the remaining term
of March 2020. The cost is (for short term loans).
on the State, but is
Issuance of Medium-
anticipated by the employer.
Long Term Bonds: The
Restrictions to Italian Ministry of Economy
dismissals: Employers are and Finance has announced
prevented from carrying out issuance of medium-long
individual and collective term bonds, which take into
dismissals in the period account the current market
from 17th March to 16th situation
May 2020. Any collective (http://www.mef.gov.it/uffi
dismissal procedure started cio-
after 23rd February 2020 is stampa/comunicati/2020/d
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 23 -
Italy: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
suspended until the 16th of ocumenti/comunicato_005
May. 9en.pdf).
Only disciplinary dismissals
can be carried out in the
above period.
Tax credit to sanitise the
workplace: For the year
2020 a tax credit equivalent
to 50% of the cost to sanitize
the workplace tofCOVID-19
contagion is granted, up to
Euro 20,000.00 for each
employer. The tax credit is
available until the
exhaustion of the allocated
limited funds.
LIB01/CLAYRUSS/6654673.8 Hogan Lovells- 24 -
Poland
As at Friday, 27 March 2020
Poland: Government Programmes
Employment Aid Debt Markets/Senior Real Estate Tax Insolvency Commercial Contracts
Lending Issues
(e.g. Tenant/Landlord (e.g. VAT, suspension of
relief) payments, filings, etc.)
Overview up to date as of 27 March 2020, at 12:30 (GMT+1)
The Polish government has submitted a draft amendment to the Law on Special Measures for COVID-19 and Crisis Prevention. The draft amendment is being discussed and voted on
March 27 by the Polish Parliament and is expected to become in full force and effect directly upon its publication. The draft amendment provides for the following changes.
Remote working: State guaranteed loans: Automatic rent Possibility of retroactive For now, the government Extension of deadlines
Employers are now entitled Lenders (other than suspension for tenants settlement of tax losses programmes / measures in contracts executed
to instruct employees to small and mid-size in shopping centres: in PIT and CIT: The loss do not provide for the pursuant to public
work remotely to prevent entrepreneurs) can ask Where a tenant is located in incurred in 2020, taxpayers, temporary suspension of procurement: Deadlines
COVID-19. for a government-backed a shopping centre (with an under certain conditions, the obligation to file for in contracts concluded
guarantee for up to 80% area in excess of 2,000 will be able to deduct from insolvency of pursuant to public
Additional childcare of the outstanding facility sq.m.) and access has been the income obtained in entrepreneurs whose procurement law have been
leave: Additional childcare balance with aim of banned by the Polish 2019. liquidity problems are extended during periods of
allowance (if an employee liquidity purposes; government, the obligations caused by the epidemic epidemic risk and
Excluding the
must take care of his/her The maximum permitted of the parties under lease and who take real steps contractual penalties for
application of
child due to the closure level of non-interest agreements expire. to restore liquidity after delay will not apply in this
regulations in income
school) paid by a state for a consumer credit has been the epidemic. respect.
taxes regarding the so-
maximum period of 14 days. substantially reduced for Lease term extension Certain procedural and
called bad debts: the
customer loans. until June 30, 2020: court deadlines that have Possibility of
provisions on bad debts in
Co-financing of salaries Banks may change credit Lease agreements that not yet been started will determination by the
PIT and CIT, under certain
of employees on facility conditions, would expire by June 30, be interrupted and those authorities of maximum
conditions, will not be
economic stoppage / including payment terms, 2020 can be automatically already running will be prices/profit margin for
applied to advances of
with reduced working for small and mid-size extended once the tenant suspended for the specific types of goods
debtors, who should take
time due to Covid-19 entrepreneur on terms submits written statement to duration of the epidemic. and services: The Minister
into account unpaid
(not yet in force): agreed with the lenders. the landlord. The tenant can This will affect, among of Health acting in
liabilities when calculating
Employers who incurred the Banks will be able to exercise this right provided others, deadlines in the cooperation with the
advances on income tax.
Economic Downturn (their amend loan agreements that such tenant did not enforcement proceedings Minister of Economy and
turnover was lower than (i) if the loan was granted breach the lease agreement Postponement of the and deadlines on which the Minister of Agriculture
LIB01/CLAYRUSS/6654673.8 Hogan LovellsYou can also read
