Insider Economy Resources 'not unlimited' minister warns, state support €1.32b

Resources ‘not unlimited’ minister warns, state support €1.32b

Finance Minister Constantinos Petrides on Monday called for unity to help Cyprus address the financial crisis resulting from the coronavirus pandemic.

“The situation is difficult. We do not have unlimited resources and what is needed this moment, in this deep crisis, it for all, the political word, the government, unity and responsibility as regards European policies and the EU so that we can get through the next, very difficult period in the best possible way,” he said.

Petriedes was speaking after a meeting chaired by President Nicos Anastasiades with political party leaders, with the participation of House President Demetris Syllouris, Central Bank governor Constantinos Herodotou and the finance minister.

Petrides said that the support package approved by the government after the extension of Labour Ministry programmes for May and June stood at 5.4% of GDP (€1.32 billion). This compared to the 3% of GDP average at EU level based on the latest Eurogroup update, he said.

He said it was essential to use all the tools made available at EU level, for example programmes unveiled by the EU Commission which concern state guarantees for business loans.

Petrides said the issue was discussed today in a constructive way and that the parties’ concerns and proposals will be considered so that the tool can be used.

The government had initially announced €2 billion in guarantees for bank loans for businesses, with the state covering 70% of the loan and the bank undertaking the remaining 30% of the risk. But the proposal has not progressed amid reservations by political parties.

Petrides warned that the potential for economic recovery dependent on how long it remained in lockdown.

“We are among the member states which have taken the most strict measures to limit the loss of life. This entails bigger consequences on the economy. And success will also be judged in the gradual opening of the economy,” the minister concluded.

 

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