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Cyprus

Coronavirus: €479m in EU loans on the way to mitigate virus impact

European Commission President Ursula von der Leyen

Cyprus is earmarked to receive €479 million in loans from the EU as part of an €81.4 billion aid package to 15 member states that the European Commission has presented to the council under the SURE instrument, it was announced on Monday.

The Commission said SURE was a “crucial element” of the EU’s comprehensive strategy to protect citizens and mitigate the severely negative socio-economic consequences of the coronavirus pandemic.

It is one of the three safety nets agreed by the European Council to shield workers, businesses and countries, the Commission said.

“Once the council approves these proposals, the financial support will be provided in the form of loans granted on favourable terms from the EU to member states,” the commission said.

“These loans will assist member states in addressing sudden increases in public expenditure to preserve employment. Specifically, they will help member states to cover the costs directly related to the financing of national short-time work schemes, and other similar measures they have put in place as a response to the coronavirus pandemic, in particular for the self-employed.”

SURE can provide financial support of up to €100 billion in total to all member states.  The proposals put forward by the commission to the council for decisions to grant financial support amount to €81.4 billion and cover 15 member states.

Loans provided to member states under the SURE instrument will be underpinned by a system of voluntary guarantees from member states. The commission said it expected that the process of member states finalising their guarantee agreements with the commission will be completed very shortly.

President Ursula von der Leyen said: “We must do everything in our power to preserve jobs and livelihoods.”

As part of its coronavirus response, the commission proposed SURE on April 2. Member states in the council adopted the regulation in May.

Each member state’s contribution to the overall amount of the guarantee corresponds to its relative share in the total gross national income (GNI) of the European Union, based on the 2020 EU budget, the commission said.

In July the separate European Recovery Fund was approved by ministers from the 27 member states. Under this plan, €2.7 billion was allocated to Cyprus. These funds were intended to help member states’ economies recover from the damage done by the pandemic.

 

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