Canton Zug, 18.06.2021

Canton has paid out CHF 104 million for hardship cases

The economy became partly dependent on government aid during the pandemic. The government council is convinced that the Zug model has succeeded.

“The pandemic seems to be gradually coming to an end," says Heinz Tännler, Finance Director of Zug, " Which is why it's time to hold a media conference to take a first look back – especially at the state aid offered by the canton of Zug. Companies have been able to submit applications for financial support up to the end of May, when the programme was terminated. There’s an interesting fact here: according to information from the Finance Directorate, an above-average number of applications were again submitted towards the end of May, a total of 50. A large proportion of these were rejected, however. By way of comparison, an overall total of 740 applications have been received, of which a good 80% were approved. "The quality of the applications has decreased towards the end," explains Heinz Tännler at the media conference and adds: "You could say there were probably some people who just wanted to try it."

Finance Director Heinz Tännler
Economics Director Silvia Thalmann-Gut.

Photos: PD

But the applications have all been carefully examined. Which is why the high number of approved applications does not suggest that the canton has spent money in a "loose-handed" way. "Rather, the process was structured in such a way that those companies who suspected that they could not benefit from the program did not even make an attempt," believes Heinz Tännler. A total of 582 companies have benefited over the last six months – not forgetting that there are still applications to be processed.

More ‘A-fonds-perdu’ contributions than expected
Heinz Tännler's basic assessment: "The hardship programme was a complete success. In this way, many bankruptcies could be averted and the Zug economy was greatly assisted." According to him, this assessment is shared by industry associations, the persons directly affected and the public.

Whether the canton of Zug should have participated in this federal programme was never up for debate. The question was rather how much money should be provided. This was originally expected to be CHF 44 million, but ultimately increased in steps to CHF 150 million. The reason for this is non-repayable contributions (‘A-fonds-perdu’) had to be paid out more often than expected. This may have been due to the fact that the measures to contain the virus have been tightened from time to time.

Who had the greatest need for assistance? As expected, the lion's share went to the gastronomy and the hotels. Around 52% of the approved contributions went there, followed by sport (9%) and the event industry (8%).

Recovery is on the way,
The state aid is now to be ended, however, stressed Economics Director Silvia Thalmann-Gut. "There could be a risk of abuse if the programme is continued," she adds. And the need for state aid can be seen to be flattening out. "The indicators point to a broad recovery of the economy." The export industry, for example, is already experiencing a strong upswing throughout Switzerland.

There are also some key figures to show that the economic area of Zug is stabilising. For example, the number of job seekers has decreased slightly. There are also more apprenticeships to be awarded. Silvia Thalmann: "The economy has come through the second shutdown well, and is regenerating itself. A few sectors, namely the catering, event and travel industries, have a longer path ahead of them than others." Further than, for example, the construction, mobility and IT industries, which are booming in the canton of Zug. But the signs are good, even in the harder-hit branches,.

The economy can now continue without state intervention. The simplified procedure for short-time working allowances is also to be cancelled, as Silvia Thalmann also believes that there is potential for abuse here.