Cyprus broadens financial support to boost the economy

Cyprus broadens financial support to boost the economy

On Wednesday, 17th June 2020, the Cyprus government announced a new EUR 150 million package of measures with the aim to boost the economy, in order to deal with the effects of the Covid-19 pandemic. This marks the third batch of support schemes by the government (https://www.stockwatch.com.cy/en/article/dimosionomika-epiheiriseis-oikonomia/government-announced-new-eu150-million-economic-support).

The Finance Minister, Mr. Constantinos Petrides, and Labour Minister, Mrs. Zeta Emilianidou, unveiled five more targeted plans to support workers and businesses. Around 50,000 beneficiaries are expected for the five plans, which are valid from 13th June 2020 until 12th October 2020 (https://cyprus-mail.com/2020/06/17/coronavirus-five-new-schemes-for-economic-recovery-worth-e150m-updated/).

The Cyprus government estimates the total cost of the three-part economic recovery programme is approximately EUR 3 billion, where EUR 1.2 billion have been slated for fiscal interventions, and EUR 1.7 billion towards improving businesses’ liquidity.

Also, the monthly cost of the five plans, would be between EUR 35 million and EUR 40 million, although it also depends on the turnover reduction of each company, that will participate in these plans (https://www.financialmirror.com/2020/06/17/covid19-cyprus-introduces-e150-mln-support-schemes/).

The first plan concerns hotel units and other accommodation for tourists, while the second offers support for businesses that are linked to tourism such as car rentals (https://cyprus-mail.com/2020/06/17/coronavirus-five-new-schemes-for-economic-recovery-worth-e150m-updated/).

The third plan concerns certain businesses that have suffered a 40 per cent loss in turnover in June and July, as well as 35 per cent in August.

The fourth plan will have government support measures for businesses that have their operations suspended due to the pandemic, while the fifth plan relates to unemployed persons who will be eligible for a lump sum of EUR 360.

The Labour Minister stressed that, since the first support measures were announced, companies which receive government support are forbidden from firing anyone. During Wednesday’s press conference, she also emphasised that employers cannot reduce staff working hours, unless the employee consents.

Moreover, the Finance Minister declared that so far, 26,000 businesses, 22,000 self-employed persons and 190,000 individuals have been helped by the government support measures. He also stated that a total of EUR 500 million was given for income subsidy in the three phases of the Support Program (https://www.stockwatch.com.cy/en/article/dimosionomika-epiheiriseis-oikonomia/government-announced-new-eu150-million-economic-support).

He also stated that Cyprus’ policies to support the economy, consist one of the largest support programs in Europe, and also the largest emergency plan to support the economy that has ever taken place in Cyprus.

It should also be noted that the Cyprus government also approved the Guarantee Agreement, amounting to EUR 38.1 million, with the European Commission, for Cyprus` participation in “SURE” mechanism, which aims to protect jobs affected by COVID-19 (https://www.financialmirror.com/2020/06/17/covid19-cyprus-introduces-e150-mln-support-schemes/).