On the one hand, yesterday, the Republic secured European funds from the Recovery Fund amounting to €50 to €69 million, after the unanimous approval by the Parliament of the bill for the establishment of the Cyprus Business Development Agency (KOAE) and on the other hand, it seems that it is permanently losing credits from the European fund amounting to €30 million.
And this is because the Parliament rejected the legislation for the imposition of a waste landfill tax, after an "alliance" of 26 MPs of AKEL, ELAM, the ALMA movement and Direct Democracy.
These parties disagreed with the imposition of the new "tax", as they characterize it, as it would burden the citizens without the infrastructure provided for in the bill. The local authorities had also spoken out against the bill.
On the other hand, the 19 MPs of DISY and DIKO voted in favour of both the bill and the relevant regulations in the midst of an intense debate.
DISY pointed out that if the Government does not proceed in 2027 with an increase in the state sponsorship to local authorities, it would ask for a change in the tax, in case the bill was approved.
And DIKO had proposed that the legal framework be approved and after the summer holidays the Parliament should re-examine the taxation of waste landfill to make it fairer.
Except for the green tax
The non-approval of this prerequisite will lead to the loss of funds of around €15 million from the Recovery Fund. The loss is added to another €15 million that the Republic lost a long time ago due to the non-implementation of the carbon tax. The final bill of the loss of funds from the Recovery Fund will be clarified by the end of August at the latest, as the deadline for compliance with the milestones to which the state has committed itself expires.
Funds for KOAE are on the way
On the other hand, the way is open for the Republic to disburse between €50 million and €69 million, as the bill for the operation of the Cyprus Business Development Organization was unanimously approved by the Parliament.
By the end of August, the Ministry of Finance will proceed with the appointment of a transitional board of directors. The bill was strengthened with safeguards, as an amendment by DISY, DIKO and the ALMA movement was approved, which will determine criteria and conditions for the maximum total amount of financial exposures that the Organization can also make to affiliated companies, with regulations that will be approved by the Parliament.
Through the KOAE, access to finance for small and medium-sized enterprises, start-ups and the self-employed will be enhanced.
Ministry of Finance: No non-viable borrowers
A few hours before the approval of the bill, Finance Minister Makis Keravnos stated that the KOAE will cover funding gaps that the banking system cannot serve. He also said that the Organization will not finance non-viable borrowers, pointing out that the safeguards included will contribute to preventing the creation of new red loans.
