Newer Updates by Minister of Finance on the three economic measures previously announced and where they stand

The Minister of Finance Mr. Constantinos Petrides made update statements on three economic measures to support businesses that can be found in Greek HERE.

The first concerns the announced interest rate subsidy plan for new housing loans, the aim of which is to support households in concluding loans for private housing purposes.

Today, together with the Banking Association, the minister announced the 10 Licensed Credit Institutions that have accepted the terms of the Plan and joined it.

The Final Plan was posted today on the website of the Ministry of Finance as well as a guide with useful questions / answers Here in Greek..

The main provisions of the Plan are as follows:

1. It concerns new loans for residential purposes (first home)
2. It covers loans that have been approved or will be approved from 1/03/2020 – 31/12/2020, by any participant in the Plan Licensed Credit Institution (API) – 10 credit institutions. Mortgages are excluded, the interest rate of which is subsidized by other special plans of the Government.
3. The amount of the loan whose interest rate will be subsidized must not exceed € 300,000
4. The duration of the interest rate subsidy will be for a period of four years, and the interest rate will be subsidized up to 1.5 percentage points (150 basis points)
5. The loan can be disbursed within 2 years from the date of approval of the loan by the Approved Credit Institution.

The second concerns the interest rate subsidy plan for new business loans, the aim of which is to improve the prospects for providing liquidity to businesses, including self-employed workers who are experiencing a sudden lack of liquidity. This Plan was approved only yesterday by the European Commission’s Directorate-General for Competition and can be implemented immediately.

Next week, more information will be announced on the process, which will be similar to the one for mortgages, as well as a list of financial institutions that will be interested in participating in the Plan.

In Summary the key provisions of the Plan are as follows:

1. It covers loans that have been approved from 1/3/2020 to 31/12/2020, by any participant in the Plan Authorized Credit Institution (API) and which concern needs of working capital and / or investments. New loans that have been repaid are excluded.
2. Interest rate subsidy duration: Four years.
3. It concerns loans concluded by very small, small, medium, large companies and self-employed workers.
4. The maximum amount of the loan, which can be granted per independent employee or company and which will receive a subsidy of the interest rate, cannot exceed € 800,000
5. Loans that will be approved until 31/12/2020 through the EIB, the Cyprus Entrepreneurship Fund and the Pan-European Guarantee Fund will also be able to participate in the Plan.
6. Excluded are business loans whose interest rate is subsidized by other special government plans.
7. The interest rate subsidy will be as follows:

Finally, the decision was taken to directly support small and very small businesses but also self-employed people, who employ up to 50 staff, with a lump sum to cover debts on rent or other operating expenses. The potential beneficiaries are 40,000 – 50,000 businesses and self-employed.

It is noted that for the one-time payment, the applicants are not required to submit an application. Assuming that very small and small businesses and self-employed people who are engaged in economic activity, were beneficiaries and received support under the Special Plans of the Ministry of Labor, Welfare and Social Insurance during the period 13/04/2020 – 12/05/2020, will receive the relevant cheque directly.

The relevant approval was received yesterday from the European Commission’s Directorate-General for Competition and the process of sending the checks to the beneficiaries will begin next week.

In summary, the amounts of the one-time lump sum payment are as follows:

Independent employees and very small businesses that were under full or partial suspension of their work and employ:

• 1 person staff – € 1250
• 2-5 staff – € 3000
• 6-9 staff – € 4000
• 10 – 50 staff – € 6000