Quantitative evaluation of the TVL and the NOW

The financial support measures for fixed costs (TOGS and TVL) and wage costs (NOW) have most likely significantly contributed to preventing substantial job losses, liquidity and solvency issues, and the survival of companies in the target group during the COVID-19 crisis. This is the conclusion drawn from our quantitative evaluation of both schemes, which was conducted in collaboration with SEO. The TVL and NOW were introduced at the onset of the COVID-19 crisis to alleviate the impact of the pandemic and the associated contact-limiting measures on businesses. The quantitative evaluation includes econometric analyses based on CBS Microdata concerning the use of financial support measures, employment, liquidity, solvency, and business closures. Additionally, the assessment incorporates results from a representative survey completed by over 1,200 companies. Furthermore, eleven interviews were conducted in this study with policymakers, implementers, representatives of users, and intermediary organisations. Existing research on the effectiveness of TOGS/TVL and NOW was also reviewed and integrated into the research. In total, companies received almost 34 billion euros in support from TOGS/TVL and/or NOW during the COVID-19 crisis. Of this amount, over 23 billion was disbursed through NOW, and over 10 billion through TOGS/TVL (as an advance payment). The uptake of both support measures was relatively high at the beginning of the crisis, partly due to the high level of uncertainty. Respondents cite various reasons why companies did or did not utilise TOGS/TVL and/or NOW. For example, companies may have chosen not to apply for TOGS/TVL and/or NOW because they believed they did not need support or were apprehensive about having to repay it. Some companies were unable to access support because they found the application process too complex, or believed the support measures were not intended for them (negative self-selection). Nonetheless, survey data and interviews indicate that both schemes are generally considered user-friendly. The majority of responding companies are positive about the conditions, speed, and application process of both TOGS/TVL and NOW. The NOW scheme most likely effectively contributed to preventing significant job losses among users during the COVID-19 crisis. Even though employment declined among NOW users despite the support, a greater decrease in employment would have been expected given the extent of the revenue loss. To corroborate the results of the econometric analysis, 70 percent of surveyed companies in the survey indicate that thanks to NOW, they were able to retain employees during the crisis. The TOGS/TVL scheme most likely effectively prevented liquidity and solvency issues among users during the COVID-19 crisis. There are hardly any differences in the annual development of liquidity and solvency among users, both compared to similar periods before the crisis and compared to non-users during the crisis. Additionally, respectively 75 and 64 percent of surveyed companies report in the survey that TOGS/TVL has helped prevent liquidity and solvency issues during the crisis. Both schemes most likely also effectively contributed to the survival of companies in the target group during the COVID-19 crisis. The econometric analyses based on CBS Microdata show that the rate of business closures among TVL and NOW users did not increase despite the revenue loss in the short term; in fact, it significantly decreased. Moreover, 69 percent of surveyed companies state in the survey that TVL and NOW played a role in ensuring their business survived the crisis. Therefore, this research demonstrates that both TOGS/TVL and NOW effectively supported companies during the COVID-19 crisis. In addition to this quantitative evaluation, we also conducted a qualitative evaluation of the NOW, which you can find here.