Cypriot President Nicos Anastasiades announced on Wednesday a revised package to pump into the economy more than 1.2 billion euros (1.32 billion U.S. dollars), about 6 percent of the country’s annual gross domestic product (GDP), to help it out of the coronavirus pandemic crisis.
He added that businesses will also have the opportunity to draw up to 1.7 billion euros in cheap loans.
Speaking after a night session of the Cabinet of Ministers, which approved the package, Anastasiades gave the outline of 10 decisions aimed at helping self-employed people and businesses out of the crisis, provided they will not lay off any of their staff.
He said that details of the package will be announced at a press conference by the finance minister on Thursday. The revised package will replace the one the government was forced to withdraw from parliament.
Anastasiades said that a total of 800 million euros will be allocated to small and medium sized businesses, with a maximum of 250 employees, through the Cyprus Business Fund.
Another 500 million euros will be given in loans to small and medium businesses, which will be 80 percent guaranteed by the European Investment Bank.
Anastasiades’ announcements came only a few hours after the European Commission announced the proposal for a 750 billion-euro recovery fund to deal with the consequences of the coronavirus pandemic.
According to the president, Cyprus will participate in the recovery fund. “Cyprus is expected to receive from this fund 300 million to 400 million euros for the needs of the Cypriot economy,” he said.
He added that beyond the loans guaranteed by the European Investment Bank, the government will subsidize the interest of loans totaling 1.7 billion euros, which will be obtained by businesses up to Jan. 31, 2021.
Anastasiades elaborated that each one of about 50,000 businesses will receive a free cash grant of between 1,500 euros and 6,000 euros according to the number of people they employed and the period they were inactive during the six-week coronavirus lockdown.
Anastasiades also announced a reduction in the value-added tax (VAT) for restaurants from 9 percent to 5 percent, and a total of 15.5 million euros in subsidies to airliners which will resume flights to and from Cypriot airports as of June 9.
He said that an additional 22 million euros will be allocated for the support of the agricultural sector.
In a bid to revive the construction sector, Anastasiades said people can obtain cheap housing loans of up to 300,000 euros.