Cyprus: Ministry of Finance meets to discuss coronavirus impact

Cyprus: Ministry of Finance meets to discuss coronavirus impact

Cypriot Minister of Finance Constantinos Petrides chaired today a meeting at the Ministry of Finance focusing on the impact of coronavirus on the economy and the tourism industry. The meeting was attended by the Cyprus Employers and Industrialists Federation (OEB), the Cyprus Chamber of Commerce and Industry (KEVE), the Cyprus Hotels Association (CHA), the Association of Cyprus Tourist Enterprises (ACTE) and Hermes Airports, while Deputy Minister of Tourism Savvas Perdios participated by phone.

After wrapping up the meeting, Constantinos Petridis noted that during the talks extensive consultations were held with the Minister of Labor Zeta Emilianidou and the social partners at the Ministry of Labor first, and then with the business community and the representatives from the tourism sector at the Ministry of Finance, during which the economic impact of coronavirus was discussed.

The Minister of Finance stressed that the issue has been under examination for weeks, having held extensive consultations with all social and business partners in order to address the situation as best as possible, adding that this constituted a matter in which the government would be firmly supportive. “This is an issue for which state intervention is justified. The state’s public finances and planning may change, but a prudent fiscal policy will serve to provide an outlet during the crisis or in case of the emergence of a crisis”, the Minister continued.

“Our economy has lived to see worse days. I intend in the next few days to complete this consultation process with the political parties and to submit a financial support package for the economy for approval, whether it concerns business and entrepreneurship, workers, job subsidies, so that over the next 2-3 months, for which adverse effects on the economy are expected, we can minimize the costs as much as possible. I am convinced that we will succeed; as I have said, we have been through worse”, the Minister added.

The EU Council of Ministers for Economic Affairs and the Eurogroup are also meeting next week. He noted that some of the key decisions regarding the Corona-Fund to support business liquidity have already been discussed and raised at European Union level, but further concrete measures will be studied. “I repeat, regardless of any European measures, the government will support the economy, the workers and the businesses with concrete and practical measures, which will be announced in the coming days”, Constantinos Petrides said.

Asked by a journalist about the cost-accounting process, Mr. Petrides replied that “there will be an overall costing to the degree of certainty that the current situation allows us, a situation that no one knows how long it will last. We will proceed according to our own estimates with an accurate costing of this package which, if necessary, will be promoted with an extraordinary budget. At this time, I would not like to disclose any further details to avoid any misinformation around costing; but when we’re talking about a budget-based package, we are referring to taxation and grants and support measures from other specific Ministries for their own policies, which are not are budgeted. We are looking at the issue comprehensively, as we should. Overall assessment and costing must be completed before we get more specific.

In another question, the Minister clarified that “the issue is not only tourism but the wider economy, but it is nonetheless true that the tourism sector, which is vulnerable to exogenous factors, has a significant contribution to GDP and to job availability. Therefore, targeting specific policies in the tourism sector is something that will certainly be included in the package”, Constantinos Petrides concluded. /ibna