Filenews 30 June 2021 - by Eleftheria Paizanou
The Commission is not fully satisfied with the law passed by the Parliament last April on state guarantees, which aims to grant state guarantees to businesses and self-employed persons, amounting to €1 billion.
According to information provided by the 'F', the Directorate-General for Competition of the European Union, which for a month and a half has had the law under its microscope, has told the Cypriot authorities that some provisions of the legislation are incompatible with the European acquis. A competent source told us that the main reservations of the European authorities concern some of the amendments passed by the House and incorporated into the law. As we have been told, the observations of European technocrats focus on the welfare included in the law and provide for a specific redistribution of €1 billion. guarantees to micro, small and large enterprises.
On 22 April, when the previous Parliament had approved the legislation, a majority approved the amendment by which total guarantees of €550 million were granted. loans received by small and medium-sized enterprises, €150 million will be provided for loans received by small and medium-sized enterprises. guarantees on loans to be granted to large enterprises and €300 million from the European Investment Bank (EIB). will be the level of guarantees for micro-enterprises and self-employed enterprises.
The bill, as tabled by the government, before the party changes, provided for the granting of €300m in guarantees. micro-enterprises, while guarantees of €700 million will be granted to small businesses. small, medium and large enterprises. European technocrats have already conveyed their concerns to the Ministry of Finance, as they consider that it is not fair to allocate the amount of state guarantees. Today, technocrats from the Directorate-General for Competition will hold a teleconference with representatives of the Ministry of Finance to ask for some clarification on the amendments adopted by the previous Parliament.
In addition, the ministry's technocrats will be asked to answer a number of other questions, as some other provisions of the legislation consider that they are not fully clear, such as the transposition from the decree to the law of the provision where which companies benefiting from state guarantees will not be able to proceed with redundancies of staff for a period of six months.
Sources from Brussels told "F" that it does not appear that the Directorate-General for Competition has any particular problem with the composition of the Monitoring Committee, which will also be set up after the adoption of a party amendment. The Monitoring Committee will include the General or Assistant Auditor General, an official from the Ministry of Finance, two central bank officials and the Auditor-General or his representative as an observer. It is worth noting that on this issue, a few days ago the European Central Bank sent an Opinion to the Central Bank (CBC), indicating that the CB cannot participate in this matter in the Commission, as it is the supervisor of the banks, which will grant the loans with a State guarantee. At the same time, the ECB considers that there will be a conflict of interest if the CB participates in the Monitoring Committee.
A government source told "F" that in order for the legislation to be implemented, the text would have to be changed, with a new decision of the House. On the one hand, the CB should be removed from the Monitoring Committee and on the other hand there should be a change in welfare in relation to the allocation of the amount of State guarantees to enterprises. Finally, both Brussels and Frankfurt made no particular comment on the other amendments incorporated into the legislation by the opposition, which suspend the payment of instalments for state-guaranteed loans for one year from their conclusion, but with interest payments.
In any case, the need for amendments to the law will inevitably cause a further delay in the implementation of the law and the granting of guaranteed loans to businesses.
