The justice of compensating for the quarantine is once again one of the main societal concerns. Previously made mistakes are leading to more and more flawed interpretations and force us to go back to the origins of the crisis. Did companies, which received “quarantine relief” from the government, have a right to breathe, move and change? In economic terms, it means to pay, invest, purchase, trade and transfer.
In March 2020, under the pressure of a growing pandemic, we voluntarily shut down the economy for the first time to protect the lives of fellow citizens. Over the next twelve months, when the economy and the people have already been locked in a lockdown, we have managed to completely devastate the services segment, we have managed to devastate children in online education and, worst of all, we have not prevented a high number of deaths from COVID.
The official rhetoric of PiS government is “to make it possible to develop micro enterprises into small, small into medium, and medium into large or even into international champions”. However, the actual measures undertaken by the government were, in fact, to petrify the size of the companies.
At the end of the day, efforts to protect domestic businesses are always paid by the consumers. Nothing is free, the same is true also for protectionism. It leads to higher prices and worse quality of services that protected businesses offer.
The cost of payment backlogs is not limited to the cost of maintaining the liquidity of the company. In addition to the interest on bank loans, one should also take into account all the additional costs associated with the monitoring of payments from contractors, chasing late payments, and growing risks caused by the delays.
The law on criminal liability of legal persons is based on the idea that not just the suspects, but all parties will be burdened by annoying duties. As a result, the government would take control over all transactions where there is a possibility of tax evasion or some other crimes.
The companies are fighting for survival in everyday competition against other companies. Up until that, everything is fine. It stops being fine when authorities interrupt this process. Their decisions and insensitive approach – made without consideration for economic consequences – can be fatal for companies.
From 2012 to 2014 Lithuania increased its minimum monthly wage by almost one third (from 800 Litas in 2012 to 1,035 Litas in 2014). There are suggestions to increase the minimum wage in 2015 even more the supporters of the idea claim that companies would adapt. But is it all that simple? According to the survey conducted by LFMI, minimum wage increases come at a cost and they eventually bring several negative consequences.