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Ministry: New Covid restriction closures to cost businesses millions

A one-month period of restrictions could cost up to 100 million euros within the restaurant industry alone, according to a ministry memorandum.

Kahvakuula painoja Fitness village kuntosalilla.
A one-month shutdown could cost the gym industry around 21.5 million euros, according to a ministry memorandum. Image: Kristiina Lehto / Yle
  • Yle News

The tightening of epidemic-related restrictions across Finland could prompt public event organisers, gyms and restaurants to see millions of euros in losses, according to a memorandum from the Ministry of Social Affairs and Health about the government's so-called "emergency brake" plans.

On Wednesday, the government announced plans to engage the brake, or tighten restrictions on public events and activities around the country.

Many areas of Finland have already taken steps in that effort. For example, authorities in the southern region of Uusimaa — home to Helsinki and often the country's highest new coronavirus cases — banned all indoor public events for three weeks.

National and local authorities are introducing or tightening restrictions over Christmas as Covid cases continue to rise.

According to the social affairs and health ministry's memo on the topic, the restrictions are expected to protect the health of citizens, the country's public health care system as well as reduce the spread of the disease.

But from an economic point of view, the impact of the restrictions will be negative, with the finance ministry estimating its economic growth forecast of three percent will shrink to 2.4 percent.

According to the Minister for Family and Basic Services, Krista Kiuru (SDP), the effect they have on the epidemic will be monitored for two weeks, after which conclusions are to be reached.

Last week, Yle asked the social affairs and health ministry for an assessment about the impact engaging the emergency brake would have. In its response to the request, the ministry sent a summary of various ministerial summaries which, broadly, anticipated the need for a new round of financial support for businesses.

Millions within various sectors

The memorandum said that 120-150 million euros would be set aside for the relief funding, which would mark the fifth time companies receive coronavirus-related support packages. According to the state treasury, businesses have already received a total of around 765 million euros in such aid.

Most of the financial pain the restrictions are likely to cause will be felt within the events industry, according to the memo, with an estimated 75 million euros in anticipated losses for public event organisers.

Meanwhile, the memorandum said if restrictions last a month, the gym industry is likely to lose around 21.5 million euros, spas will see losses of 5.5 million euros and restaurant tills could haemorrhage up to 100 million euros.

The assessment said the Ministry of Education and Culture was planning around 36 million euros a month for the culture sector.

The ministry's memorandum also noted other possible consequences of the restrictions, including an increase in people gathering for private parties in lieu of attending public events, causing potential disruptions and increased work for police.

"In extreme reactions, some citizens could protest against the restrictions," the memorandum reads.