Cyprus Announces ?2 Billion Revival Package to Combat Economic Impact of COVID-19

Strategic Insights -

In a televised address, President Nicos Anastasiades announced a ?2 billion economic revival package to help the country recover from the economic impact of the COVID-19 crisis. The package includes a wide range of measures, such as liquidity grants, interest rate subsidies, and home loan subsidies, aimed at supporting small and medium-sized enterprises (SMEs), mid-cap companies, and individuals.

The revised package will inject more than ?1.2 billion into the economy, equivalent to 6% of the country's gross GDP, to help rescue and restart the economy. The President outlined a 10-point economic plan to support SMEs, mid-cap companies, and individuals, including liquidity grants, interest rate subsidies, and home loan subsidies.

Key Takeaways:

  • The Cyprus government has announced a ?2 billion economic revival package to combat the economic impact of COVID-19, with a focus on supporting SMEs, mid-cap companies, and individuals.
  • The package includes liquidity grants worth ?800 million from the European Investment Bank (EIB) through the Cyprus Entrepreneurship Fund, with a 50% state guarantee for SMEs employing up to 250 people.
  • The government has allocated ?300-?400 million from the Pan-European Guarantee Fund, with loans guaranteed by the Pan-European Guarantee Fund at 80%.
  • Interest rate subsidies will be provided for new business loans, with a 4-year subsidy of up to 3.5 percentage units for SMEs and 1.5 percentage units for large companies.
  • Home loan interest rate subsidies will be extended for 4 years, with a subsidy of 1.5 percentage units for loans up to ?300,000.
  • The government has also decided to reduce VAT from 9% to 5% for the tourism and hospitality sectors.
  • Liquidity grants worth over ?410 million will be provided for SMEs and self-employed family businesses.
  • The government will increase its aid for the agriculture sector from ?12 million to ?22 million.

Statistics:

  • The revised package will inject more than ?1.2 billion into the economy, equivalent to 6% of the country's gross GDP.
  • The package includes liquidity grants worth ?800 million from the European Investment Bank (EIB) through the Cyprus Entrepreneurship Fund.
  • The government has allocated ?300-?400 million from the Pan-European Guarantee Fund.
  • Home loan interest rate subsidies will be extended for 4 years, with a subsidy of 1.5 percentage units for loans up to ?300,000.
  • Liquidity grants worth over ?410 million will be provided for SMEs and self-employed family businesses.

Sources:

  • The Cyprus government's announcement on May 27, 2020.
  • The European Investment Bank (EIB).
  • The Cyprus Entrepreneurship Fund.
  • The Pan-European Guarantee Fund.
  • The Council of Ministers.
  • The Ministry of Finance.
  • The Ministry of Labor.
  • The Ministry of Health.