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FinMin: Cyprus enters recovery phase as banks say they are ready to support the economy

LoveCyprus — Wed, 03 Jun 2020 05:52:54 +0000

The first signs from the market following the partial lifting of lockdown measures are very positive, Minister of Finance Constantinos Petrides said on Tuesday, adding that “we will emerge victorious from this uncertain battle.”

Cyprus President Nicos Anastasiades and Petrides discussed the situation of the economy with the CEOs of the Cypriot commercial banks after the launching of the government second support package that contains interest rate subsidies and VAT reductions for the tourist sector and guarantees to the European Investment Bank for cheap loans to the economy through local banks.

It was a very constructive discussions, we pass to the second phase, that of recovery, Petrides said in statements following the meeting adding “both the government and the banking sector will contribute with the means at their disposal towards that end.”

“Market sentiment is changing and this is very important,” Petrides said.

On the interest rate subsidy, Petrides said this is a very important assistance and what we said today is that while entering this second phase and with the change in sentiment of the people, the banks with their participation and by explaining these rapid procedures will do their part so that we all support the economy.”

“And we have every right to be really optimistic that we will manage to emerge victorious from this crisis.”

Responding to a question, Petrides said “the first signs concerning the market and the labour market following the partial lifting of restrictions are very positive and we have every right to be optimistic.”

Stating that there will be more data in the coming period, the Finance Minister added that “it seems the government’s measures have acted as a catalyst.”

He also noted that the growth registered in the last years have given the public finances and the private economy the resilience necessary to cope with the crisis.

“Of course, there are problems, currently our plans are more targeted but we are convinced we will emerge victorious from this uncertain battle, both the private sector, the state, the government and political parties. And this is the positive message we should give as we pass to the restart phase,” he concluded.

On his part, Ioannis Matsis, President of the Association of Cyprus Banks (ACB) assured that the banks have the intention, the liquidity and the capital buffers to support the economy.

Welcoming the government measures, Matsis said that measures such as interest rate subsidies and loans through the EIB will give the banks greater capacity to provide loans.

He also observed that since the relaxation of the lockdown measures and by monitoring credit and debit card movement and other data “we have seen the economy expanding rapidly.”

“Therefore, things seem better than our April estimates and we are very optimistic,” he said.

Asked on the role of the banks in the economic restart phase, Matsis said “as banks we have the will, the intention the liquidity and the capital adequacy to support the economy.”

“It would be beneficial for all, both the society, the economy and the banks alike, to proceed with (granting of) financing and liquidity,” he said, pointing out however that banks always need to assess the viability of the borrowers.

But Matsis noted that “the schemes announced by the government will bring increase volume (to the banks) and will be very helpful.”

Source: CNA

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Cyprus coronavirus economic package to amount to €1.5 billion, CNA learns

LoveCyprus — Tue, 24 Mar 2020 07:05:05 +0000

Cyprus’ Finance Ministry is working to finalise a revised economic support package which will amount to at least €1.5 billion, approximately 7% of GDP, reliable sources told CNA.

Last week Finance Minister Constantinos Petrides announced a financial support package amounting to €700 million equivalent to 3% of Cyprus’ GDP. However, Petrides following a meeting with parliamentary parties, announced the government will approve additional measures, including the provision of government guarantees.

According to a FinMin source, Petrides will continue contacts today and tomorrow with the Central Bank Governor, Constantinos Herodotou, with representatives of political parties and with the CEOs of commercial banks.

Petrides will meet with Herodotou today along with the FinMin’s and CBC dedicated teams to discuss the issue of granting government guarantees to borrowers affected by the coronavirus epidemic.

The aim is to finalise the revised economic package tomorrow the latest in a bid to submit bills to the Council of Ministers for approval, the same source told CNA.

“The package will amount to at least €1.5 billion,” a high-ranking official told CNA, noting that the package will include direct support, deferred government income in the form of payment suspension of direct and indirect taxes and other fees, as well as government guarantees which will not incur fiscal impact unless they materialise.

Source: CNA

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State considers granting €2 billion guarantees to unlock credit to the economy amid COVID19 epidemic

LoveCyprus — Tue, 24 Mar 2020 06:55:04 +0000

The Cyprus government is considering a plan to provide state guarantees to banks amounting to €2 billion, in a bid to unlock credit to self-employed, small and medium-sized enterprises and large corporations, hit by the coronavirus epidemic.

The plan, which will be put into consultation with the Cypriot banks provides for the granting of government guarantees to SMEs and self-employed persons amounting to €1.7 billion and €0.3 bl for large corporations.

The aim of the plan, a copy of which was obtained by CNA, “is to provide state government guarantees with a total amount of up to €2 billion to Cypriot licensed banking institutions, including subsidiaries of foreign credit institutions with the purpose to provide loans to companies and self-employed persons (to help them) to deal with the consequences of the measures to combat the coronavirus (epidemic).”

The plan aims to cover the credit risk encouraging the bank to provide cheap new loans from April 2 until the end of the year, as well to cover the credit risk current loans of Self-employed persons, SMEs and large corporates which have been hit by the coronavirus epidemic.

Furthermore, the plan also covers the issuance of current accounts and overdrafts that may not exceed 50% of amount offered to a self-employed person, 25% of the amount provided to an SME and 15% of large corporation.

“The provision of loans aims to cover the companies’ and self-employed persons’ liquidity needs, working capital and investments,” the draft reads.

However, the draft makes clear that self-employed or corporates that had non-performing exposures at the end of 2019 will not be eligible for the plan.

As far as the limit of loans is concerned, the draft notes that a loan cannot exceed an amount that is double of a company’s or a self-employed total annual wage bill in 2019 or the latest available year, or cannot exceed the annual wagebill for the first two years of operation in case of companies or self-employed persons that began operations in January 2019.

According to the draft, in some justified cases and based on liquidity plans, loans can be increased to cover the liquidity needs for the next 18 months in case of a self-employed person or an SME and the next 12 months when it comes to a large corporation.

According to the draft, the plan will be put into force on April 2 until the end of the year.

Source: CNA

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Minister of Finance: Support package to ease coronavirus economic impact to be announced soon

LoveCyprus — Thu, 12 Mar 2020 08:17:17 +0000

A financial support package for the economy in order to address the consequences from coronavirus disease, will be finalized in the next days by the Government, following the completion of contacts with various stakeholders and political parties, the Minister of Finance Konstantinos Petridis said. He also stressed that an extraordinary budget, will be approved next week by the Cabinet.

The support package, according to the Minister of Finance, will be targeted at businesses and entrepreneurship, as well as employees and subsidized employment and will concern taxes, grants and support measures for specific Ministries to promote their own policies that are not budgeted.

Petrides was speaking after a meeting at the Ministry of Finance with stakeholders of the tourism sector. Deputy Minister of Tourism Savvas Perdios, also participated in the meeting by telephone, as he is in self-isolation as a preventative measure against the coronavirus due to a return trip.

Earlier on, the Minister of Finance had extensive consultations with the Minister of Labor, Zeta Emilianidou and the social partners on the issue.

Petrides said that he expected in the next few days to complete the consultation with the political parties and to submit an overall financial support package to the Cabinet for approval, in order to ease the virus impact to the economy.

The Minister also said that one of the issues discussed with the Minister of Labor was the support of employees to avoid loss of income but also to remain employed.

He added that the Council of EU Finance Ministers and the Eurogroup would meet next week and that some key decisions are already being discussed and taken at EU level as regards the coronavirus and the fund aimed at supporting businesses.

“Regardless of any European measures, the Government will support the economy, employees and businesses with specific applicable measures which will be announced in the coming days,” he said.

He added that the package will also include measures related to tourism.

Source: CNA

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