Cyprus Mail

Government to submit budget for House approval in next few days (Updated)

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The government intends to submit a supplementary budget of €220m to parliament for approval in the next few days as it rolls out measures to support businesses stricken by the coronavirus crisis, Finance Minister Constantinos Petrides said on Monday.

Most of the cash will go to the labour ministry’s schemes to support employment while €100m will be used for the direct funding of small businesses and the self-employed.

Speaking before the House finance committee, Petrides said the rest of the measures he announced last week will not require parliamentary approval.

Those include €500m in guarantees from the European Investment Bank to finance SMEs and €400m to the entrepreneurship fund.

An additional €180m will be needed to subsidise interest rates, the minister said. The first payment is expected in March 2021.

“My intention, with the agreement of parliament, is to submit a supplementary budget in the next few days to cover the labour ministry’s new schemes and the direct subsidisation of businesses,” he said.

Petrides had to come up with a fresh raft of measures after he pulled a bill for state-backed borrowing over disagreements with the opposition.

The minister said he decided to withdraw the bill after two months of haggling because opposition amendments made it unenforceable.

Among the opposition’s demands was the inclusion of the auditor-general on a committee to supervise the process, which would have been carried out by commercial banks.

“This package is a bridge package, which also consistent with the new era of easing the measures and restarting the economy,” Petrides said. “What is important is that we are turning a page, we are moving forward, the economy is being reactivated, the engines are working again, and the state and parliament are here so that we can move forward.”

Committee chairman, Diko MP, Angelos Votsis, said its members will examine the supplementary budget as soon as possible.

Votsis said none of the MPs sought on Monday to engage in a blame game over the withdrawn bill.

“The objective today was to see the fastest way to channel money into the market … to tackle the coronavirus crisis,” he said.

The minister told MPs that the cabinet could approve the supplementary budget by Wednesday.

Petrides said the fiscal impact of the second support package would be €400m, including the tax breaks approved by the cabinet on May 27.

Ruling Disy MP Onoufrios Koulla said afterwards that it was time for unity to rescue the economy and put the country back on track for growth.

Main opposition Akel said the government programme continued to be based on borrowing, which did not help indebted small businesses.

“From what the government brought its clear that large and medium businesses with access to lending will benefit and at the same time receive generous subsidies for their loans,” spokesman Stephanos Stephanou said.


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