Filenews 25 October 2022
The European Commission has today given a positive preliminary assessment of Cyprus' request for payment of €85 million under the Recovery and Resilience Facility, which is the main tool of NextGenerationEU.
In a statement, European Commission President Ursula von der Leyen said she has "good news for Cyprus", which has made sufficient progress in developing its recovery and resilience plan to receive its first payment from NextGenerationEU.
As she said, once the member states give the green light, Cyprus will receive €85 million as a result of the good and rapid progress it has made in implementing the first package of reforms and investments of the plan.
"This package includes important measures for the green and digital transitions, as well as for strengthening financial stability and fighting corruption. So congratulations, Cyprus!" she added.
Von der Leyen finally assured that "the Commission stands by your side to make your NextGenerationEU project a success."
For his part, Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, congratulated Cyprus on fulfilling the first 14 milestones set out in its recovery and resilience plan.
Many of them, he added, will contribute to Cyprus' green and digital transitions, with electricity market reforms, investments to promote the use of renewable energy sources, promotion of the circular economy and a national plan to boost digital skills, while strengthening the fight against corruption and improving the environment to reduce non-performing loans.
Paolo Gentiloni, Commissioner for Economy, also said in a statement that "today marks an important step towards the implementation of the Cyprus recovery and resilience plan".
Saying that the Recovery and Resilience Facility is the strongest common tool at our disposal, the Italian Commissioner called on "the Cypriot authorities to continue its implementation with determination".
"Seizing this opportunity is fundamental as we navigate together the turbulent seas of our time and strive to make our economies more sustainable, competitive and inclusive," he concluded.
It is recalled that an application for the first disbursement was submitted by the Cypriot government on 28 July 2022 based on the achievement of the 14 milestones set out in the Council implementing decision for the first tranche. The evaluation process took about three months, and the disbursement is expected to take place around December.
"The milestones met demonstrate the significant progress achieved in implementing Cyprus' recovery and resilience plan, as well as its broader reform programme," the Commission said in a press release, adding that they include important measures, such as the reform ensuring the independence of the Cyprus Transmission System Operator from the incumbent Cyprus Electricity Authority; a national action plan on e-skills and laws on transparency in public decision-making and on whistleblower protection. A reform aimed at reducing the level of non-performing loans is also included.
The disbursement of €85 million is expected to take place in December, after the preliminary positive adoption, the Commission sent the positive preliminary assessment to the Economic and Financial Committee (EFC, Member States), requesting its opinion. The EFC's opinion, to be adopted no later than four weeks, should be taken into account in the Commission's assessment. Subsequently, following the EFC's opinion, the Commission will adopt a final decision on the disbursement of the financial contribution, in accordance with the examination procedure, through a committee.
Cyprus becomes the 10th EU member state to secure preliminary approval and has already received €157m of pre-financing.
We "lost" €90 million subsidies due to better economic performance
In the meantime, as the CNA is informed, Cyprus, due to better economic performance during the Covid-19 pandemic, lost €90 million from subsidies, resulting in a decrease in total subsidies to €916 million, while loans remain unchanged at €200 million. Following this development, the total financial envelope of the national Recovery and Resilience Plan stands at €1,016 million. from €1,216 million previously.
According to the same sources, this is a "mechanical operation" on the basis of updated Eurostat statistics. When the distribution key of the RRF subsidies was agreed, the allocation was compiled on the basis of estimates on macroeconomic data such as GDP growth and unemployment in each country in 2020 and 2021. Following the revision of the data in June this year, on the basis of real data, the distribution of subsidies has changed.
It is reminded that Cyprus during the Covid-19 pandemic and in 2021 exceeded the estimated performance after regaining the lost ground from the coronavirus crisis. The same applies to all EU member states that exceeded initial estimates, which "lose" part of the subsidies, which are allocated to member states that were ultimately hardest hit by the Covid-19 pandemic.
Now, as the CNA is informed, Cyprus is called upon to fill this gap either with its own resources, or through possible additional Community funds from the Cohesion Fund, if available. In addition, Cyprus can also raise €52.5 million in subsidies from the RepowerEU tool dedicated to promoting decarbonisation and decarbonisation of Russian fossil fuels.
On the basis of the Council decision, the RepowerEU proposal provides that these funds are dedicated to projects in the field of energy.
CNA
