The Cabinet on Wednesday approved an additional budget of 250 million euros to cover the needs resulting from the management of the pandemic.
In statements after the meeting, Finance Minister Constantinos Petrides said the decision had been taken “despite the fact that 150 million euros had been committed in the 2021 budget for emergencies. resulting from the management of the pandemic ”.
The additional budget of 250 million euros will cover employment support programs and programs for businesses and the unemployed, worth 140 million euros, which will be implemented by the Ministry of Labor until ‘in May of this year.
The budget will also cover an expenditure of 60 million euros for the purchase of coronavirus vaccines and rapid antigen tests, as well as consumables, medical supplies and services to support the Ministry of Health. An additional amount of 50 million euros will be allocated to deal with various other emergencies that may arise in the year in relation to the pandemic.
The impact of the proposed supplementary budget on the budget balance is estimated at 1.2% of GDP, Petrides said.
He added that the Cabinet had approved a bill to provide government guarantees to credit institutions for lending to businesses and self-employed people affected by COVID-19. The minister said a number of changes had taken place from a previous plan, submitted by the government after consultation with political parties.
The bill itself stipulates that 300 million euros of guarantees will be allocated to new loans to very small businesses and the self-employed, while an additional 700 million euros will be allocated to new loans to small, medium and large enterprises. , said Petrides. Government guarantees will be granted until December 31, 2021 instead of June 30, 2021 as provided for in the previous bill.
The Treasury of the Republic of Cyprus will submit a report every two months, in order to monitor and inform the Minister of Finance on the progress of the granting of government guarantees. The minister will then inform the parliamentary finance committee of the Treasury’s findings every three months.
Petrides said government guarantees of one billion euros would lead to an increase in liquidity in the economy, worth at least 1.43 billion euros.
For her part, Labor Minister Zeta Emilianidou said the Cabinet also approved the extension of employment support schemes until June 2021.
It is very important that our programs continue to support employment, with particular emphasis on hotels and businesses affected by the tourism situation, noted the Minister.
Emilianidou also welcomed the decision of the European Commission to give the green light to Cypriot projects, approving additional funding of € 125 million, with the total amount of financial assistance reaching € 604 million.