Funding the business: European govts’ sector-relevant aid

Voucher schemes, cultural hardship funds, compensation programmes and loans for small businesses… As the economic fallout from the coronavirus pandemic rumbles on, IQ takes a look at the financial measures taken by governments and other organisations in different European markets that serve to benefit the live industry.

Austria
In Austria, where all public events are banned until after the end of June, the government has introduced a hardship fund, which acts as a “safety net for the self-employed”.

The €2 billion euros is designed to act as a rapid first aid measure to help freelancers

In the ongoing first phase of the fund, self-employed people who currently have no turnover are supported in covering their living expenses. The money is a one-time grant and does not have to be paid back.

The hardship fund is in addition to a €38bn funding package dedicated to helping businesses, including €4bn in emergency aid for workers on reduced hours and small and medium-sized companies, €9bn in credit guarantees, €15bn in emergency funding for branches that are particularly exposed and €10bn for tax deferrals.

Self-employed workers can apply for the hardship fund here.

In Austria, the government has introduced a hardship fund, which acts as a “safety net for the self-employed”

Belgium
The Belgium government, which has extended its ban on festivals until 31 August, is among those to introduce legislation allowing event organisers to offer vouchers instead of cash refunds for cancelled shows.

The government has introduced a fiscal envelope of €10bn to address the crisis and €50bn of guarantees for new bank loans to companies and self-employed, including increasing support for those in temporary unemployment and self-employed.

The Belgium government is among those to introduce legislation allowing event organisers to offer vouchers for cancelled shows

Denmark
Denmark, where no large-scale live music events will take place until 31 August, implemented a compensation scheme early on in the crisis that allows organisers of events over 1,000 people to recover some earnings in the event of government-forced cancellations. The scheme was recently extended until 9 June 2020.

The government has also provided assistance to cultural institutions. Those that depend on public subsidies to cover 50% or more of their costs are covered by the auxiliary packages for salary compensation and compensation for fixed costs. The scheme is expected to add DKK 140m (€18.8m) for the benefit of cultural life.

Cultural institutions will also be able to receive an advance on government grants to help wit liquidity challenges. The scheme covers around 900 cultural institutions in the country.

Wage subsidies of up to 75% are also available to workers in the cultural and arts sectors that can expect a loss of income of at least 30% due to the coronavirus crisis.

According to the International Monetary Fund (IMF), the total amount of fiscal aid provided by the Danish government totals around DKK 60bn (€8.04bn).

Denmark implemented a compensation scheme for organisers early on in the crisis

France
The French government recently extended its ban on large-scale gatherings and events until “at least mid-July”.

Following the announcement, French culture minister Franck Riester tweeted that the coming months would be “difficult” for the cultural sector, promising that targeted measures would be implemented in due course.

The measures, announced on Friday (17 April), include granting artists and creators access to the solidarity fund, a financial aid package dedicated to small businesses. The amount of aid will be calculated by taking an average of earnings over the past twelve months. Applications can be made until 15 May.

All cultural associations that hire part-time or seasonal workers can now benefit from the short-term unemployment scheme, which covers up to 70% of a worker’s annual income.

The ministry of culture has also created a support unit for festivals, with the aim of giving assistance to event organisers on a case-by-case basis.

According to the IMF, the overall cost of France’s response plan to the pandemic is around €156m.

Finland
The Finnish government is providing €650m of grants to small- and medium-sized businesses and the self-employed, as well as €3bn in expanded parental allowance, social assistance and unemployment insurance.

The Music Promotion Foundation (Mes) is also providing €500,000 in special work grants to alleviate the problems caused by the coronavirus epidemic in the music sector. The support is intended for creative work for individuals, such as composing, lyricising or arranging, practising performance/recording software, or a combination of both.

The Finnish government is providing €650m of grants to small- and medium-sized businesses and the self-employed

Germany
In Germany, where large-scale live events are banned until 31 August, the government has established a special Corona Cabinet to tackle the crisis.

The cabinet has been responsible for the introduction of a “short-term, practical voucher solution” for event organisers and is pushing for EU-wide regulation on the matter.

Emergency federal aid has been put in place for the self-employed, small business and freelancers, with solo self-employed and companies with up to ten employees eligible for grants to cover operating costs from a fund of €50bn.

Medium-sized companies can apply for the new KfW quick loan for purchases (investments) and running costs (operating resources). The loan is 100% secured by a federal guarantee.

The total amount of budgetary measures put in place by the government for employees, the self-employed and companies amounts to €353.3bn and the total amount of guarantees is €819.7bn.

German collection society, GEMA is providing financial aid totalling around €40 million in a two-stage program. The scheme is primarily aimed at composers and lyricists who also act as performers and who face financial difficulties due to event cancellations.

The Corona Aid Fund provides financial transition aid of up to €5,000 for individual hardship cases within the framework of social and cultural support.

The German Stage Members’ Cooperative (GDBA) is providing €50,000 in solidarity support for theatre professionals who are in need due to the crisis. Applicants to the fund must “justify there plight” to the association here.

In Germany, where large-scale live events are banned until 31 August, the government has established a special Corona Cabinet to tackle the crisis

Italy
Italy, the first European country to be hit by the coronavirus outbreak and one of the worst affected, is another market where a ticket voucher policy has been instated to aid event organisers.

The government has also created an €130m emergency fund dedicated to live entertainment, audiovisual arts and cinema.

Self-employed and seasonal workers in the country can apply for a €600 one-off payment from the government, which became available on 1 April.

The European Commission also recently approved an aid scheme to support self-employed workers and companies with up to 499 employees, including cash grants and state-guaranteed loans of up to €800,000 per company.

Italian collection society, the Italian Society of Authors and Publishers (SIAE), has allocated €500,000 to buy food pckages for its most vulnerable members as well as creating a fund of €60m to help members through the impact of Covid-19 in the next year.

The Italian government has so far dedicated €400bn to helping businesses through the coronavirus crisis, in addition to €340bn in government-backed loans.

Italy is another market where a ticket voucher policy has been instated to aid event organisers

Netherlands

In the Netherlands, where public gatherings and events are currently banned until 1 June, targeted support for the cultural sector totalling €300m was announced last week. The purpose of the funding is to support institutions deemed essential for the sector as a whole.

The government has implemented other fiscal measures including compensation of up to 90% of labour costs for companies expecting a reduction in revenues of 20% or more as well as compensation for affected sectors.

The government’s package, which the IMF estimates to include spending measures of €10 to 20bn in the next three months, includes support for entrepreneurs and the self-employed and scaling up of the short-time working scheme to mke unemployment benefit compensation available to companies needing to reduce their staff by at least 20%.

Dutch consumer protection agency, Netherlands Authority for Consumers and Markets (ACM) has established guidelines for those wishing to implement a voucher scheme, stating that “due to the current extraordinary situation, it may be more reasonable and wiser for consumers to accept vouchers instead of demanding refunds”.

“Due to the current extraordinary situation, it may be more reasonable and wiser for consumers to accept vouchers instead of demanding refunds”

Norway
The Norwegian government has implemented a compensation scheme for organisers of cultural events. The scheme applies to events with up to 60% public funding and covers lost ticket revenue, participation fee or additional expenses during the current period to a minimum of NOK 25,000 (€2,200). The deadline for applications is 21 April.

According to the IMF, Norway’s k ey implemented and proposed fiscal measures amount to around NOK 139bn (€12.3bn).

Portugal
The Portguese government has introduced a voucher scheme, allowing event organisers to offer credit on another show for any event cancelled or postponed from 28 February until 90 days after the end of the country’s state of emergency.

Cultural associations affected by coronavirus can access a wage subsidy scheme covering 70% of wages for furloughed workers. Self-employed workers can also apply for financial assistance of up to 70% of monthly earnings for up to six months.

The government has also announced €3.7bn of state-guaranteed credit lines for medium, small and micro enterprises in affected sectors, operated through the banking system.

The Portguese government introduced a voucher scheme, allowing event organisers to offer credit on another show for cancelled or postponed events

Spain
On Friday (17 April), Fun&Money, a cultural patronage platform subsidised by the Ministry of Culture and Sport, launched a €2m to support the cultural sector.

The Spanish government has presented an emergency package of economic and social measures to help the cultural sector, including the Erte programme (expediente de regulación temporal de empleo), which allows companies to issue temporary redundancy to its workforce as a result of coronavirus. Employees can then claim up to 70% of their salary through unemployment benefits.

Support for the self-employed specifically for discontinuous or seasonal cultural professional takes into account the reduction of income from six months to a whole year.

Spanish promoters’ association APM last week published a new set of demands from the sector, including the application of force majeure to allow the postponement or cancellation of events scheduled before the state of emergency; more flexible ticket refund policies; the creation of an economic compensation fund for those in the live industry and adaptation of the Erte and state financing funds to fit “the reality of the music industry”.

According to the IMF, key measures implemented by the Spanish government amount to around €13.9bn, but could be higher depending on the usage and duration of the measures.

The Spanish government has presented an emergency package of economic and social measures to help the cultural sector

Sweden
In Sweden, the cultural sector has received SEK 500m (€45.9m) in extra support due to the economic impact of Covid-19, going to, among other things, activities that lose revenue as a result of the restriction of public events, and to organisers of smaller events.

Earlier this month, the Swedish government also increased the basic amount of unemployment insurance from SEK 365 (€34) to SEK 510 (€47) per day, for those who become unemployed after working full time. For those who become unemployed after working part-time, the amount is reduced proportionally. The ceiling amount in unemployment insurance has also been increased from SEK 910 (€84) to SEK 1,200 (€110) per day during the first hundred days of compensation.

Based on the authorities’ estimates, the announced fiscal package in Sweden amounts to SEK 384bn (€35.4bn) to SEK 672bn (€61.9bn), depending on uptake.

In Sweden, the cultural sector has received SEK 500m (€45.9m) in extra support due to the economic impact of Covid-19

Switzerland
In Switzerland, where the government has yet to make a final decision on the fate of summer events, companies that have suffered economic damage as a result of the cancellation or postponement of events or projects or from company closings can contact their local government by 20 May 2020 to apply for compensation.

The default compensation covers a maximum of 80% of the financial loss.

On 16 April, the government also revealed a CHF 280m (€266m) aid package for the cultural sectors over the next two months, when the situation will be reassessed.

In the event that companies encounter financial difficulties to pay wages and invoices, the government has also unlocked a CHF 20bn (€19bn) fund to facilitate low interest loans and for cash advances

Among the specific aids to culture, the Confederation has entrusted Suisseculture Sociale with the mission of assigning emergency aid to artists and cultural actors in difficulty. In the cultural sphere, complementary loans are provided for up to 30% of the turnover.

According to the IMF, supportive fiscal packages implemented by the Swiss government amount to over CHF65bn (€61.8bn).

The Swiss government has revealed a CHF 280m (€266m) aid package for the cultural sectors over the next two months

UK
In the UK, many industry organisations have set up emergency funds, including PRS For Music’s emergency relief fund, offering grants of up to £1,000 for each of its members; the Musicians’ Union’s £1m coronavirus hardship fund; the Association of Independent Music’s (AIM) £500,000 crisis fund; Help Musicians’ £5m coronavirus financial hardship fund, which today (22 April) received a £50,000 donation from the Andrew Lloyd Webber Foundation; and the Music Venue Trust’s fund for grassroots music venues in crisis.

The UK government has introduced a coronavirus job retention scheme, covering up to 80% of the wages of furloughed workers. The same wage subsidy – of up to 80% of average monthly profits – is also available for self-employed workers, who have worked as such for over a year.

The coronavirus business interruption loan scheme provides up to 80% cover for loans of up to £5 million from commercial banks to small businesses, interest on these loans will not be due for 12 months.

For businesses eligible for a small business rate relief, there is access to a one-off grant of £10,000 from the small business grant fund. This is for businesses with a rateable property value of up to £15,000 in England and Northern Ireland, £12,000 in Wales and £18,000 in Scotland.

Important sources of funding not included? Email [email protected] to submit any additional information.

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