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EU disburses €157m in recovery funds to Cyprus

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The European Commission announced on Thursday the disbursement of €157m to Cyprus in pre-financing, as part of the funds and loans to be provided under the Recovery and Resilience Facility (RRF).

The Commission notes that the pre-financing is equivalent to 13 per cent of the funds allocated to Cyprus. This pre-financing will help to kick-start the implementation of the crucial investment and reform measures outlined in Cyprus’ recovery and resilience plan.

Future disbursements will be based on the implementation of the investments and reforms outlined in Cyprus’ national plan. Cyprus is set to receive €1.2 billion in total, with €1 billion provided in grants and €200m in loans.

Today’s disbursement follows the recent successful implementation of the first borrowing operations under NextGenerationEU. By the end of the year, the Commission intends to raise up to a total of €80 billion in long-term funding, to be complemented by short-term EU-Bills, to fund the first planned disbursements to Member States under NextGenerationEU.

Commissioner for Economy Paolo Gentiloni said that the pre-financing “will help Cyprus to implement important measures for the climate transition and to tackle the threat of forest fires, to boost the country’s digital competitiveness and to strengthen education and training.” Gentiloni also welcomed Cyprus’ commitments “to limit possibilities for aggressive tax planning.”

Commissioner for Budget and Administration Johannes Hahn said that he is glad that the disbursement stage for the RFF has been reached. “Intense cooperation with Cyprus and solid preparation within the Commission allowed us to pay out the funds in record time. This shows that with the resources raised, we will be able to swiftly deliver on the pre-financing needs of all Member States, thus giving them the initial boost in implementing the numerous green and digital projects included in their national plans,” he added.

Part of NextGenerationEU, the RRF will provide €723.8 billion (in current prices) to support investments and reforms across Member States. The Cyprus plan is part of the unprecedented EU response to emerge stronger from the Covid-19 crisis, fostering the green and digital transitions and strengthening resilience and cohesion in our societies.

Commission President Ursula von der Leyen said that this first disbursement for Cyprus is an “important milestone”. “These measures will help to secure Cyprus’ digital and green transitions by supporting energy efficiency, sustainable mobility, education and training and improving connectivity,” Von der Leyen added.

“I am particularly proud that a significant portion of the funds will be devoted to protecting Cyprus against the threat of forest fires,” the Commission President stressed.

The RRF in Cyprus will finance investments and reforms on securing the green and digital transitions and increasing economic and social resilience.

On the green transition, the Cypriot plan will invest €89m in energy efficiency and renewable energy measures, €87m in promoting sustainable and green mobility, and €19m to upgrade the country’s capacity to combat with fire hazards through the purchase of firefighting aircraft, vehicles, equipment and the provision of related training.

On the digital transition, the plan will direct €133m to the digitalisation of public services, building a secured, integrated and modern digital architecture to support the transition to a combination of digital public services. It will also invest €87m to enhance access to communication infrastructure and supporting an inclusive digital transformation.

Finally on economic and social resilience, €51m will be invested on increasing the quality of education and training through reforming the teaching profession and secondary schools’ curricula, establishing a modern vocational education and introducing a higher education graduate tracking system. It will also introduce a withholding tax on outbound payments made to EU-listed non-cooperative and low tax jurisdictions and other measures to curb aggressive tax planning.

 

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