President unveils new stimulus package

President Nicos Anastasiades announced on Wednesday a new set of measures to support tourism, businesses, and the self-employed workers that took a hit in the coronavirus pandemic.

Following a Cabinet meeting, Anastasiades said in a televised address that the government decided a scheme of incentives up to 6.3 million euros with a view to boost the tourist sector and Cyprus’ connectivity. He noted that along with the current scheme the amount reaches 15.7 million euros that will be allocated by end of 2020.

Moreover, with a view to reinforce the tourist accommodations and restaurants they decided to reduce VAT from 9% to 5% for the period from July 1st 2020 until January 10th 2021.

Anastasiades also said his administration would utilize new tools for granting cheap loans of more than €1.7 billion. He went on to say that the government decided to provide liquidity amounting to 800 million euros to finance Small and Medium Enterprises (SMEs), through the Cyprus Entrepreneurship Fund, noting that the new set of approved measures aims to support the real economy of the country, “utilizing fully the tools provided by the EU and the European institutions.”

He further noted that in order to grant loans to the Cypriot SMEs and to mid-cap companies, the government decided, in cooperation with the European Investment Bank, to increase the loan scheme by 500 million Euros.

The Cabinet also approved the participation of the Republic of Cyprus in the Pan-European Guarantee Fund, aimed to address repercussions of the COVID-19 pandemic in EU member states. Anastasiades said Cyprus is expected to draw 300-400 million euros from the fund to cover needs of the Cypriot economy.

The government also decided for a four-year interest rate subsidy scheme for new business loans to enterprises, including the self-employed, which lack liquidity due to the pandemic. This concerns loans that were granted or will be granted from March 1st 2020 until December 31st 2020.

Beneficiaries will be all the enterprises and self-employed, under the condition that they are not considered problematic as provided by the definition of the European Commission. Anastasiades said that the measure falls within the guiding lines issued by the European Commission.

In addition, Anastasiades said, an amount of 22 million euros will be allocated to support and boost the agricultural sector as has already been said by the Agriculture Minister.

The President said that the total amount of grants with a view to safeguard jobs, partly cover the operational expenses and rents of the self-employed and the businesses, is up to or will exceed 430 million euros.

At the same time, he noted, boosting liquidity gives the potential to draw loans amounting to 1.7 billion euros, without taking into consideration the subsidizing of interest rates by the state for business and house loans.

The President said that the government has proved once again its determination to support the dynamic restart of the Cypriot economy.

“I want to assure you that we will take any other measures considered necessary, with the same determination, within of course the the state’s economic potentials,” he said.

Details about the measures adopted will be given by Finance Minister Constantinos Petrides during a press conference that will be held on Thursday.