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COVID19: Government says it stunted sharp jobless rise

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Emergency support launched by the government amid the coronavirus pandemic saved thousands of jobs and businesses, Labour Minister Zeta Emilianidou said.

“Our strategic goal at this stage is to tackle the consequences of the pandemic and that is why we are supporting employment to avert a rise in unemployment,” Emilianidou told MPs when presenting the Ministry’s 2021 budget.

The ministry has disbursed €450 mln to support the income of employees and an additional €100 mln to cover operational costs of small and medium-sized businesses.

This expenditure is covered by funding from the EU’s SURE fund from which Cyprus was allocated €479 mln.

The first tranche of €250 mln has been disbursed while the remaining €229 mln is expected to be disbursed in early 2021.

And the cabinet has approved additional measures of €130 – €150 mln to support employees that were affected by the local lockdowns in Limassol and Paphos.

Emilianidou said the support schemes which began when pandemic started in early March have supplemented the income of more than 190,000 employees and over 23,000 self-employed while the unemployment allowance was extended beyond six months.

“All these schemes have assisted significantly so that we would not have a drastic rise in unemployment.”

Emilianidou said unemployment is expected to rise to 8% due to the pandemic but added everything is contingent on how COVID-19 progresses and whether there will be a third wave.

“That’s why no forecasts can be made because the data is fluid.”

The Ministry’s budget for 2021 provides for €1.41 bln, up 12% from this year, including welfare expenditure of the Social Insurance Fund’s various schemes total expenditure rises to €3.1 bln.

Emilianidou said the Ministry will launch a digital application and payment of unemployment and other allowances provided by the Social Insurance Fund.

Due to the pandemic and the ensuing lockdown measures, the Ministry was forced to launch a digital platform for social insurance allowances in just one month.

“With the experiences acquired in March, we launched changes particularly in the Social Insurance system.”

Until the end of December, all tellers in the Social Insurance District offices will be closed and applications, as well as payments, will be made online.

The government had to put the implementation of a minimum wage in Cyprus on hold due to the pandemic.

“You cannot implement a minimum wage when unemployment is rising,” Emilianidou said.

She recalled that the government’s decision was to implement the reform in conditions of full employment.