COVID19: Cyprus shipping urges MPs to back loan scheme

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The Cyprus Shipping Chamber has urged the government and political parties to agree on a financing scheme to alleviate the impact of the coronavirus pandemic by providing cheap loans to companies.

CSC General Director Thomas Kazakos told CNA that since the beginning of the outbreak the impact on freight rates on global shipping ranged between 20% and 30% depending on the sector.

He said it is too early to make comprehensive estimates on the impact of the pandemic on shipping, but certainly coronavirus will have medium to long-term consequences depending on containment and how quickly economic activity restarts.

He welcomed the government and political parties backing fiscal measures to support the real economy which benefited Cyprus shipping, but the “tool of government guarantees would be supportive in mitigating the coronavirus impact”.

The €2 bln government scheme to shore up the economy during the shutdown, has been held-up in parliament.

It involves the provision of state-backed low-interest loans worth €1.75 bln to businesses and the self-employed to help them ride out the lockdown. Another €250 mln goes to subsidising the interest rate.

“Although shipping companies have been hit severely due to freight rate reductions, there is an opportunity for these companies which are still economically robust to continue operating with quick and cheap funding,” Kazakos said.

He said the funding tool could also assist shipping firms in expanding their activities to other markets where the opportunity arises due to COVID-19.

“Shipping knows of rough seas but it is a sector that requires political and economic support to avoid significant impact,” Kazakos said.

He said that shipping addressed practical issues since the outbreak such as crew changes and ship certificates, affected by COVID-19 containment measures taken worldwide.

Certificates both for seafarers and ships have been extended so that global and Cypriot shipping is still able to operate until these measures are eased.