InsiderEconomyParliament to vote down bill on government-guaranteed bank loans

Parliament to vote down bill on government-guaranteed bank loans

A government plan to guarantee up to €2bn in bank loans to businesses and self-employed people will be voted down by parliament, Phileleftheros reports.

This is obvious after main opposition Akel’s objection was followed on Tuesday by that of centre Diko with the party asking for the debate set before Friday’s House plenum to be postponed.

Diko demands numerous clarifications before the bill is approved, especially on the provision that 70% of the loan will be undertaken by the state and 30 % by the bank in the case where a borrower fails to meet his/her obligations.

Ruling Disy has also raised concerns with party leader  Averof Neophytou saying it was highly doubtful from the start that a common solution on the bill could be reached. And that the bill had gone through so many changes that made it impossible to be effective.

He also said that socialist Edek, the Solidarity Movement, Greens, Citizens Alliance and far right Elam were also against the proposed bill.

However, as the bill is set to be shelved the financial teams of Akel and Diko, along with experts, are jointly drafting new proposals so that the €2 billion is spent on employees.  Because, they are certain the coronavirus consequences on the economy will be prolonged.

Akel’s leadership on Wednesday is to hold a conference call with experts so as to finalise the party’s proposals on direct support of the state towards employees and society at large.

Amongst other, the opposition party will propose the issuance of an international bond with the money raised going towards employees.

The Finance Ministry was, afterall, considering ways to pump out fresh liquidity that would, however, act as a security cushion in the case where traditional state revenue is reduced dramatically.

Akel may also propose that employees are exempted  from certain obligations such as the payment of social security and taxes. On the other hand, Diko proposes that the state proceeds with the internal lending of €2 billion so as to sustain employment.

Diko MP Angelos Votsis said the internal lending should guarantee that government plans in support of employees continue.

At the same time, despite the fact that the proposed government bill on guarantees loans will be put on ice,  Finance Minister Constantinos Petrides on Tuesday sent to parliament the revised texts of both the bill and the decree on this.

Amendments include a provision clarifying that state guarantees up to €350 million will be given to loans for the self-employed and small businesses. Also, government guarantees of up to €250 million will be granted to subsidise part of the interest rate on performing loans of natural persons.

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