By Elias Hazou
THE Cabinet has green-lighted government guarantees to the European Investment Bank (EIB) to the tune of €105m to finance small and medium sized businesses and middle capitalisation companies.
Under the deal, the EIB will lend €25m to Alpha Bank (Cyprus), €15m to Piraeus Bank (Cyprus), €25m to the National Bank of Greece (Cyprus), €10m to Societe General Bank (Cyprus) and €30m to Eurobank Cyprus.
The deal between the government and the EIB comes under a scheme designed to boost entrepreneurship and export trade in Cyprus, currently in recession following a meltdown of its financial sector last year.
The crisis led to the shuttering of Laiki, the island’s second largest bank, and a restructuring of the largest lender, Bank of Cyprus, which was ‘bailed-in’ by uninsured depositors as part of a rescue deal with international creditors.
Positive budgetary performance since has led to a slight upgrading of Cyprus’ sovereign credit rating, and last month three of four Cypriot banks got a clean bill of health in an EU-wide stress test.
Also yesterday, the Cabinet approved the conclusion of a loan agreement between the government with the EIB financing planned expansions to the University of Cyprus campus in the Athalassa area.
The EIB financing, up to €162m, is to be used to expand the campus, upgrade existing infrastructures and build new infrastructures, in a project spanning from 2014 to 2020.