COVID19: Finance Minister calls for unity to save Cyprus economy

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Cyprus Finance Minister Constantinos Petrides appealed to political party leaders for unity on Monday in tackling the financial implosion brought on by the coronavirus crisis.

All non-essential businesses have been shut down, including bars, clubs, restaurants, retail shops, construction, hotels and gyms.

Effective the Cyprus economy is running on fumes while most Cypriots stay home.

He warned that Cyprus was going through a difficult time and state resources were finite, calling on parties to join forces with the government in dealing with the COVID-19 outbreak.

“The situation is difficult, and we don’t have unlimited resources and what’s necessary is to display maximum unity and responsibility to overcome the difficult period ahead in the best way,” Petrides said.

He made the comments after a meeting at the Presidential Palace where party leaders were briefed by President Nicos Anastasiades on the state of the economy and government efforts to soften the blow from the coronavirus crisis.

Petrides said that the government’s package to keep businesses afloat will exceed €2 bln.

“The government’s fiscal support package following adjustments for May and June now reaches 5.4% of GDP or €1.32 bln, as opposed to 3% of GDP, which is the average European level, according to latest Eurogroup figures.”

Petrides argued that all the tools provided at European level should be used, such as the programs promoted by the European Commission regarding government guarantees to companies through borrowing.

On this issue, the Minister said that a very thorough and constructive discussion took place with the political party leaders.

Meanwhile, the government has been pushing parliament to approve government issuing state guarantees of up to €2bn in bank loans to businesses and self-employed people since measures restricting free movement were introduced.

The Finance Minister, commenting on when recovery is expected to begin, said that this will depend on the length of the period the economy remains on lockdown.

Officials estimate that the economy could shrink by 9% of GDP this year.