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Hardship funds boosted for struggling Swiss companies

Man eats in restaurant
The Swiss catering industry may lose up to 50,000 jobs due to the pandemic. Keystone / Salvatore Di Nolfi

The Swiss government is adding an additional CHF300 million ($330 million) in hardship payments to help small companies cope with the effects of the Covid-19 pandemic.

Hardship payments were set up to support the worst hit firms, such as restaurants and bars, that have been forced to close for longer than other businesses.

Nearly CHF3 billion has been paid out to more than 30,000 companiesExternal link so far. The majority of payments (CHF2.7 billion) are in the form of subsidies that are not expected to be paid back.

While Switzerland has been gradually lifting lockdown measures in recent weeks, some firms are still obliged to restrict the scale of their business.

Up to 50,000 jobs have been lost in the catering sector since the start of the pandemic, says the industry association Gastrosuisse.

The hardship allocation is two-thirds funded by the government and one-third by cantons. On Friday, the government added an extra CHF300 million from its CHF1 billion reserve fund to be distributed to various cantons.

Lost sales

In addition to releasing funds, the government says the payments of up to CHF1.5 million per company will now cover up to 30% of lost sales, as opposed to the previous benchmark of 20%.

A special hardship rule has also been created for the smallest companies, which the government says should cost no more than CHF500 million.

Parliament has made tens of billions of francs available to cushion the effects of the pandemic in various ways. Some of this money will be issued in loans and is expected to be paid back.

The Swiss economy as a whole is rebounding from the pandemic more robustly than anticipated, the State Secretariat for Economic Affairs said this week.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR