Traditional businesses will also be able to benefit from the €2.7 billion in financial aid the EU has made available to Cyprus even though the funds are effectively destined to companies promoting green and digital strategies, the Cyprus Chamber of Commerce (Keve) said on Wednesday.
“It’s undeniable that the recovery fund will especially be beneficial to companies who invest in green and digital solutions,” Keve’s Leonidas Paschalides, an expert in EU issues, told the Cyprus Mail on Wednesday.
“However, with the right strategies, many businesses that are traditionally neither green, nor digital, will be able to receive the help they need.”
After a marathon summit session earlier this week EU leaders approved a €750bn coronavirus recovery fund. Cyprus will receive €1.451bn raised from the Multiannual Financial Framework 2021-2027, and the rest – up to €1.3 bn – from the recovery fund.
The European Commission has recommended that all countries that will be benefitting from the post-Covid financial help should focus their investments on the green and digital transition, in particular on clean and efficient production and use of energy, waste and water management, sustainable transport, digitalisation, research and innovation.
This has raised questions whether industries and businesses that cannot promote or implement green or digital business strategies will be effectively cut out from the fund.
“Not necessarily, provided businesses show a certain spirit of adaptation,” Paschalides said.
He also said Keve is absolutely in favour of a gradual transition towards green and particularly digital solutions, a need that was highlighted during the coronavirus pandemic and that saw companies successfully shift towards smart-working.
“However, it is imperative that, after the proposed transition, companies and industries remain business-friendly and that their profits will not suffer from it,” Paschalides said.
He added that the government is still making plans regarding where the recovery fund will go, a plan that needs to be approved by the European Commission before being officially implemented.
“I expect that the plan will be ready and approved by the EU by the end of 2020, it’s unlikely to see it implemented before.”
Other recommendations made to Cyprus by the EU include the pursuing of fiscal policies aimed at achieving prudent medium-term fiscal positions and ensuring debt sustainability, while enhancing investment, and the strengthening of the health system by improving the health workers’ working conditions and the quality of services.
Furthermore, the need to provide adequate income replacement and access to social protection for all and to promote flexible working were also highlighted.
The funds will be dispensed to all EU member states in the form of grants and loans over a period of three years.
As far as Cyprus is concerned, the aid will amount to 70 per cent of the total dispensed in 2021 and 2022, with the remaining 30 per cent to be granted in 2023.