Financial Encouragement to Help Businesses Counteract with the Virus Effects.

06/04/2020

A financial stimulus package to help businesses tackle the impact of the coronavirus, which has already decimated the island’s tourism and travel sector, is to be finalised in the coming days, Finance Minister Constantinos Petrides said on Wednesday.

Petrides chaired a meeting Wednesday afternoon attended by the Employers and Industrialists federation (OEV) the Chambers of Commerce and Industry (Keve), the Cyprus Hotel Association (Pasyxe) and the Association of Cyprus Tourism Enterprises (Stek). Deputy Minister for Tourism Savvas Perdios was also there.

Petrides said the package of stimulus measures would be finalised with input from the political parties and other players in the economy. It will be generated through a supplementary budget, the minister said but declined to cite a figure. The package will aim to support businesses and entrepreneurship and employees through subsidies and will also involve tax-breaks and grants through different ministries.

He said the government had been looking at the unfolding of the coronavirus crisis for weeks and had been discussing it with the social partners and with business leaders “to address the situation as best we can”.

“It is a matter where state intervention is justified,” Petrides said.

He said he intended over the next few days to complete this consultation with the political parties and to submit the support package for approval to the House to ease the pressure on the economy over the next two or three months “and try to make them as painless as possible”.

He added that Cyprus has been through worse in the past. “I am convinced that we will succeed… as I have said.. we have had more difficult times.”

Petrides also said that the EU finance ministers, the Eurogroup, would be meeting next week to take key decisions regarding the ‘Corona Fund’ to support business liquidity. “But I reiterate that regardless of any European measures, the government will support the economy, support the workers, and support the businesses with concrete and practical measures to be announced in the coming days,” he added.

Asked about the cost, he said, it would be estimated with an eye on the degree of certainty that the current situation allows “a situation we don’t know how long will last”.

“At the moment, I would not like to go into details,” he said.

Prior to the meeting with business leaders, Petrides discussed the coronavirus fallout with Labour Minister Zeta Emilianidou and the three main unions, Sek, Peo and Deok.

Emilianidou said that among the topics discussed were ways to deal with the closure or temporary closure of businesses, employee sick leave, parental leave in cases where schools could be closed for a longer time, but especially the hotel industry.

Tourism is among the top priorities for government given its contribution to the economy and the fact that global travel was the first and hardest hit in the immediate aftermath of the coronavirus outbreak. Cyprus is expecting one of the worst years for tourism in probably two decades. The aim now is to only limit the decline, Perdios said on Tuesday.

Petrides said the issue was not just tourism but the wider economy. “But we cannot deny the fact that the tourism sector, which is vulnerable to external parameters, has a significant contribution to GDP,” he said.

According to the business community, the measures they’ve requested don’t differ from those taken in other countries, and include the postponement of deadlines for the payment of social security contributions and taxes and some subsides for labour costs such as the payment of unemployment benefit to affected employees forced to take unpaid leave due to quarantine requirements or illness. They also suggest a reduction in the cost of electricity.