Measures announced by the President of the Republic of Cyprus to support the economy termed as plan B on Wednesday May 27th

Taking extracts from the speech as outlined by the President Mr. Nicos Anastassiades we can highlight a number of key items:

1. Concession of liquidity amounting to 800 million euros for financing of Small and Medium Enterprises, through the Cyprus Entrepreneurship Fund. Beneficiaries will be small and medium-sized enterprises with a maximum staff of 250 people per company.

2. For loans to Cypriot small and medium-sized enterprises and medium-sized companies, the government has decided to work with the European Investment Bank to increase its lending plan by 500m euros.
Beneficiaries will be companies that have been registered and operate in Cyprus and employ up to 3,000 employees per company.

3. The Council of Ministers approved the participation of the Republic of Cyprus in the Pan-European Guarantee Fund, which was created for the purpose of addressing the effects of the COVID-19 pandemic on the Member States of the European Union.

Cyprus is expected to raise 300m to 400m euros from the fund for the needs of the Cypriot economy. Beneficiaries will be Small and Medium Enterprises and Medium Capitalization Companies, which have been hit by the pandemic. It should be noted that the loans granted will be 80% guaranteed by the Pan-European Guarantee Fund. The plans foresee protection-of-jobs clauses.

4. Interest rate subsidy plan for new business loans to businesses, including self-employed workers, who face a lack of liquidity as a result of the pandemic. It concerns loans that have been concluded or will be concluded from March 1, 2020 to December 31, 2020. Beneficiaries will be all businesses and Self-employed, provided they are not considered problematic under the European Commission’s definition. The measure is in line with the guidelines issued by the European Commission.

The interest rate subsidy will be for 4 years as follows:
In the first two years the interest rate will be subsidized up to 3.5 percentage points, while for the third to fourth year the interest rate will be subsidized by 2 percentage points for Small and Medium Enterprises and 1.5 percentage points for large companies.

5. The Council of Ministers, in order to support home ownership, decided to subsidize interest rates for a specified period of time and with a fixed maximum loan amount.
This concerns loans that have been concluded or will be concluded from March 1, 2020 to December 31, 2020 and will not exceed 300 thousand euros.
The duration of the subsidy will be for four years and will amount to 1.5 percentage points of the interest rate.

6. Subsidy Plan for Very Small and Small Businesses and Independent Employees.
The aim of the plan is to cover part of the rent and operating expenses. The total amount of the subsidy exceeds 100 million euros. The sponsorships apply to 50,000 very small, small businesses and self-employed people who employ up to 50 employees.

The amount of the one-time sponsorship is distributed as follows:
Independent employees and very small businesses that were under full or partial suspension of their work and were included in the Special Plans of the Ministry of Labor in the period April 13 – May 12, 2020 and employed:

(a) Up to one person: € 1250
(b) From 2 to 5 people: € 3000.
(c) From 6 to 9 people: € 4000.
(d) From 10 to 50 people: € 6000

7. In order to strengthen the recovery, the Council of Ministers decided to instruct all competent authorities to immediately announce tenders for all development projects based on the President’s announcements or other projects that are mature, regardless of their scheduled announcement period based on the budget.

8. Therefore, the implementation of development projects is not suspended but accelerated. It is understood that the decision currently excludes the work concerning the building of the House of Representatives.

9. In order to strengthen the tourism sector and the connectivity of Cyprus, an additional incentive plan of 6.3 million euros was decided, which with the current plan amounts to a total of 15.7 million euros that will be paid by the end of 2020.

10. In order to strengthen the tourism, accommodation and catering sector, the VAT rate is reduced from 9% to 5% for the period from 1 July 2020 to 10 January 2021.

Full details will be provided by the Minister of Finance on Thursday.

The full details of the speech in Greek are found HERE.