Blümel: Millionth COFAG application for Corona aid processed
Economy now bigger than it was pre-crisis - appeal to Austrians to get vaccinated so as not to jeopardise recovery
COFAG (COVID-19 Finanzierungsagentur des Bundes GmbH) was set up to support the Austrian economy through the COVID-19 pandemic. It is responsible for providing government support to domestic businesses. This includes guarantees, fixed cost subsidies, the loss compensation facility and turnover loss bonus as well as lockdown turnover compensation. In total, COFAG has authorised some EUR 9.5 billion in financial assistance to date. And COFAG has just processed its millionth application.
Finance Minister Gernot Blümel commented: “Our aim was always to protect the Austrian economy, our businesses and jobs, and to provide the best possible assistance to help them all get through this crisis. In setting up COFAG, we created a structure that is characterised by an extremely high degree of flexibility, and which has proven itself during the crisis. One million applications are a clear sign that we have achieved our aim.”
The millionth application was submitted by the restaurant-café “Giorgina” in the centre of Vienna. For owner Fuad Vojic, who has received just under EUR 150,000 in financial support through COFAG during the crisis, the aid has been critical to the business’s survival. Mr Vojic described the huge challenges posed by the onset of the pandemic in March 2020: “We had the feeling the rug was being pulled out from beneath our feet. Our operating and domestic fixed costs amounted to just over EUR 10,000 per month at the time. And my wife was still on maternity leave until the end of May 2020.”
The Vojic family acquired the family-run business in 2007 and had employed ten people before the pandemic hit. The business has since become a training workplace. Applying for the various forms of assistance was indeed, as promised, very easy to do and payments were made swiftly.
“All in all, the assistance provided by the state has been a huge support to us. Nevertheless, we hope we will not need it again,” owner Fuad Vojic said in conclusion.
Since January 2021 the numbers of applications received have declined steeply. Whereas just under 130,000 applications were received for the period January 2021, in August fewer than 10,000 applications were submitted. This can be ascribed to the strong economic recovery that has been in evidence since the summer. This is also reflected in the volume of subsidies paid out by COFAG: where this amounted to EUR 600 million still in January, in August it only came to just under EUR 55 million.
“The Austrian economy is now back above pre-crisis levels. The economic aid we have provided, together with the health measures to combat the pandemic, has made this recovery possible - however, there is no alternative but to go into overdrive on the vaccination front for the coming winter season, so as to protect the health of our Austrian citizens and not to jeopardise the economic recovery. Every single one of us can play their part in this,” said Blümel.
Talking about the Corona aid measures, Blümel stated: “The Austrian economy is currently performing very well in the circumstances and the Austrian Institute of Economic Research’s growth forecasts have even been revised upwards. Furthermore, as many Corona aid measures are still being offered, there is no requirement for new measures. If circumstances change then this will of course be re-appraised.”
Swift processing and a high level of transparency
It was important, because of the lockdown, not only to assist businesses with a broad mix of measures, but to get these measures out to businesses and working for them swiftly. The data provided on the COFAG website includes information on processing times and shows that the median time for authorising an application for a fixed cost subsidy I has been 9 days, lockdown turnover compensation in November only 6 days and turnover loss bonus 7 days. This demonstrated that the agency has succeeded in providing support extremely swiftly and also with appropriate transparency.
Strict controls and transparency mechanisms have been imposed on COFAG since it was set up. COFAG’s Advisory Committee, which can scrutinise every case, is composed of experts in the field, together with the social partners. In addition, every parliamentary party has the right to appoint a delegate to represent them on the Advisory Committee. Furthermore, numerous reporting obligations to Parliament have been implemented by the Federal Ministry of Finance. And Parliament has already exercised its right to commission the Court of Auditors to scrutinise the executive structures and functions of COFAG.
Correction notices can still be filed up until year-end
If businesses have received subsidies from COFAG that the guidelines show they were not, or not wholly, entitled to, there is still the possibility of submitting a correction notice to COFAG up until the end of the year. This facility has already led to nearly 700 grants totalling EUR 9.5 million being repaid to COFAG.