Cyprus to receive EUR 2.7B from landmark EU Recovery Fund Deal

Cyprus to receive EUR 2.7B from landmark EU Recovery Fund Deal

It was announced by the Government of the Republic of Cyprus on Tuesday, 21st July 2020, that Cyprus would receive over EUR 2.7 billion from the European Council deal on the Multiannual Financial Framework (MFF) 2021 – 2027 and the post-pandemic Recovery Fund (https://in-cyprus.philenews.com/president-welcomes-eu-recovery-fund-deal-cyprus-to-get-over-e2-7b/).

Specifically, Cyprus would receive EUR 1.451 billion from the Multiannual Financial Framework 2021-2027, and the remaining EUR 1.25 billion from the Recovery Fund.

The President of the Republic of Cyprus, Mr. Nicos Anastasiades expressed his gratitude in a written statement issued after the  EU27 Summit in Brussels, “I express my full satisfaction because, after many days and intensive negotiations, Cyprus has achieved the economic goals it had set in relation to the MFF and the European Union Recovery Plan” (https://www.financialmirror.com/2020/07/21/covid19-cyprus-happy-with-eu-deal-on-recovery-fund/).

President Anastasiades said that the funds aim at addressing the consequences of the pandemic and to promote the development of the Cypriot economy. He continued by stating that a detailed analysis will follow at a later stage by the Minister of Finance (https://in-cyprus.philenews.com/president-welcomes-eu-recovery-fund-deal-cyprus-to-get-over-e2-7b/).

The above follows the EU leaders agreeing on a total EUR 1.8 trillion spending package aimed at containing an unprecedented downturn by resorting to new measures that could ultimately deepen the bloc’s economic integration (https://www.wsj.com/articles/eu-leaders-close-in-on-coronavirus-recovery-plan-deal-11595274568).

The package involves a EUR 750 billion coronavirus recovery fund, consisting of EUR 390 billion in grants and EUR 360 billion in low interest rates for countries badly affected by the Covid-19 pandemic. The German Chancellor, Ms. Angela Merkel, was the driving force for securing the EUR 750 billion economic rescue, following an earlier agreement between her and French President, Macron (https://www.wsj.com/articles/angela-merkel-macron-covid-coronavirus-eu-rescue-11595364124?mod=itp_wsj&mod=&mod=djemITP_h).

The package also consists of EUR 1.07  trillion for 2021 – 2027, to rebuild the economies and launch the green and digital transitions (https://www.investopedia.com/eu-leaders-reach-historic-deal-on-eur750-billion-covid-recovery-fund-5071916).

It is important to note that the agreed package, which took four days of intense discussions among the bloc’s 27 leaders – the block’s longest summit in 20 years – is the biggest joint borrowing ever agreed by the EU. Summit Chairman, Mr. Charles Michel, stated that it was a “pivotal moment” for Europe, and that “We showed collective responsibility and solidarity and we show also our belief in our common future” (https://www.bbc.com/news/world-europe-53481542).

Other EU leaders praised this landmark deal, with President Macron declaring it a” historic day for Europe” and the European Commission President, Ms. Ursula von der Leyen, tweeting “Today we’ve taken a historic step, we all can be proud of. But other important steps remain. First and most important: to gain the support of the European Parliament. Nobody should take our European Union for granted”.

Moreover, in relation to the EUR 2.7 billion in financial aid the EU has made available to Cyprus, Mr. Leonidas Paschalides of the Cyprus Chamber of Commerce, who is an expert in EU issues, stated on Wednesday, 22th July 2020, that “It’s undeniable that the recovery fund will especially be beneficial to companies who invest in green and digital solutions” (https://cyprus-mail.com/2020/07/23/eus-green-digital-stipulation-for-recovery-funds-not-a-problem-says-keve/).