After over two weeks of discussions between the Ministry of Finance, the Ministry of Labor, the Central Bank, the Association of Cyprus Banks and other financial entities to minimize the impact of coronavirus on the Cyprus economy, white smoke has emerged with all parties agreeing that payoffs for all types of loans are to be suspended for nine months.
The European Banking Authority, in its announcement on Thursday, seems to have also triggered this decision, as it said that any loans with payments past due as a result of the coronavirus crisis will not be considered non-performing loans.
According to Kathimerini Cyprus, the suspension of loan payments for nine months will be announced after the Cabinet meeting on Thursday, when Ministers are also expected to approve a reviewed package of economic support measures aiming to curb the consequences of the virus epidemic.
The support package, which will include the suspension of loan payments, will also require approval by Parliament on Friday, though parties are expected to unanimously back the measure.
Beneficiaries of the nine-month plan will be all businesses and individuals with loans that have been performing until a specified time, which Kathimerini Cyprus expects will be until February 29 of this year.
This is also supported by Astrobank's announcement yesterday, where it announced a Mortgage Loan Suspension Scheme for mortgages that did not have overdue payments until the end of February.
This week, the government announced it was planning to provide state guarantees to banks amounting to €2 billion, in a bid to unlock credit to self-employed, small and medium-sized enterprises and large corporations hit by the coronavirus epidemic.
Of the €2 billion budget of the plan, €1.7 billion would be offered as guarantees for loans to small and medium-sized enterprises and self-employed workers, while €300 million will be earmarked for loans to larger companies.