Philenews 21 March 2020 - article by Antonis Antoniou, Eleftheria Paizanou
Through a 1.5 billion-euro firepower guarantee scheme, the government seeks to support businesses and especially small and medium-sized enterprises that will be hit by a lack of liquidity due to mandatory shoplifting and consumption decline due to the spread of coronavirus and related diseases. protection measures.
The government's financial staff is well on its way to completing the second economic support package that places particular emphasis on business liquidity injection. According to F's information, the government and the finance ministry have worked out a plan to guarantee new loans of up to 1.5 billion euros in an effort to keep the market from draining.
The amount did not come about by accident, but corresponds to some of the funds released to banks by the relaxations announced by the European Central Bank and the Central Bank of Cyprus in recent days. In this way, banks' funds will not be significantly affected.
According to preliminary information, the plan will cover companies from all sectors of the economy, not just those included in the relevant decrees issued recently, as well as self-employed ones. The self-employed have been a big issue, as no support measure has been announced so far. However, the plan will not cover all businesses individually, but only those that have been proven and evidence-based have not previously faced financial problems. The reason for the split is to avoid exploiting the government guarantee scheme and zombie companies to solve problems that were not caused by the coronavirus epidemic.
According to the analysis, the plan comes and completes the decisions of the Banking Authorities as well as the Government's initial package, as it will help support businesses not only directly but until the economy returns to its previous position, which is not expected done immediately but will take some years, so its duration is expected to be over six months.
The aim is to make the lending through the mechanism at a lower cost than today's interest rates to really help businesses. After all, the state guarantee is also aimed in this direction. Indeed, it is thought that some aspects will be regulated so that banks are certain to engage in certain matters.
Not beating public debt but…
Following consultations and guidelines issued by the European Commission, government guarantees will not have an impact on public debt, however they will be considered as contingent liabilities and in case of default by the borrower they will also be triggered. the corresponding amount will hit the public debt by raising its levels.
"Hot" weekend
Yesterday Finance Minister Konstantinos Petridis had contacts with the bankers to whom he transferred the government's intentions. Over the weekend, finance and labor ministry technocrats will be working feverishly to prepare bills to boost the liquidity of small and medium-sized businesses and for self-employed. The goal is to bring the bills to the House by Monday so that they are approved by Wednesday at the latest.
At the same time, yesterday, House Speaker Dimitris Soulouris called on party leaders to address the finance and labor ministers on the law proposals they intend to submit. AKEL, as we have been told, expects the plan to support the self-employed and will insist on the suspension of the divestments. A competent source stated that many of AKEL's suggestions have been included in the bills. DIKO is in an open line of contact with the relevant ministries, while EDEK insists on suspending the divestments for three months to include the takeover companies. Indeed, The Minister of Finance neither accepted the proposal submitted by Ecologists President George Perdikis to change the definition of non-performing loans but also abolished the annual fee of € 350 for small businesses. Solidarity is proposing inter alia a suspension of social security contributions for three months but also of the annual fee for companies, which ministers again disagree with. Today, Alliance President George Lillikas will put forward a proposal to the minister to give taxpayers the option to pay VAT for liquidity purposes of state funds.
The government's financial staff is well on its way to completing the second economic support package that places particular emphasis on business liquidity injection. According to F's information, the government and the finance ministry have worked out a plan to guarantee new loans of up to 1.5 billion euros in an effort to keep the market from draining.
According to the analysis, the plan comes and completes the decisions of the Banking Authorities as well as the Government's initial package, as it will help support businesses not only directly but until the economy returns to its previous position, which is not expected done immediately but will take some years, so its duration is expected to be over six months.
The aim is to make the lending through the mechanism at a lower cost than today's interest rates to really help businesses. After all, the state guarantee is also aimed in this direction. Indeed, it is thought that some aspects will be regulated so that banks are certain to engage in certain matters.
Not beating public debt but…
Following consultations and guidelines issued by the European Commission, government guarantees will not have an impact on public debt, however they will be considered as contingent liabilities and in case of default by the borrower they will also be triggered. the corresponding amount will hit the public debt by raising its levels.
"Hot" weekend
Yesterday Finance Minister Konstantinos Petridis had contacts with the bankers to whom he transferred the government's intentions. Over the weekend, finance and labor ministry technocrats will be working feverishly to prepare bills to boost the liquidity of small and medium-sized businesses and for self-employed. The goal is to bring the bills to the House by Monday so that they are approved by Wednesday at the latest.
At the same time, yesterday, House Speaker Dimitris Soulouris called on party leaders to address the finance and labor ministers on the law proposals they intend to submit. AKEL, as we have been told, expects the plan to support the self-employed and will insist on the suspension of the divestments. A competent source stated that many of AKEL's suggestions have been included in the bills. DIKO is in an open line of contact with the relevant ministries, while EDEK insists on suspending the divestments for three months to include the takeover companies. Indeed, The Minister of Finance neither accepted the proposal submitted by Ecologists President George Perdikis to change the definition of non-performing loans but also abolished the annual fee of € 350 for small businesses. Solidarity is proposing inter alia a suspension of social security contributions for three months but also of the annual fee for companies, which ministers again disagree with. Today, Alliance President George Lillikas will put forward a proposal to the minister to give taxpayers the option to pay VAT for liquidity purposes of state funds.
