Cabinet approves â‚¬300 mln state guaranties scheme for Cypriot banks

The Cabinet approved on Thursday a 300 mln euros state guaranties’ scheme for Cypriot banks, in order to secure loans from the European Investment Bank (EIB) to finance developments projects and small and medium enterprises (SMEs).

According to Deputy Government Spokesman Victoras Papadopoulos, the decision is of paramount importance for the Cypriot economy.

In statements after the Cabinet meeting, Papadopoulos said that the scheme will be submitted to the European Commission’s DG for Competition to secure approval “the soonest possible”.

The Deputy Government Spokesman said that the EIB has already concluded consultations with the Cooperative Central Bank to secure loans worth 50 mln and the relevant agreement is expected to be signed in the first week of April, during the EIB President’s official visit to Cyprus.

The target is to materialize the scheme in the coming few weeks and months, Papadopoulos said.

He also referred to a loan agreement of 100 mln that was signed last December, to finance and establish the Entrepreneurship Fund, operated by the European Investment Fund.

Moreover, Papadopoulos recalled a decision last October to approve an external trade financing scheme, worth 150 mln, supporting extrovert Cypriot companies.

Moreover, he said that on December 13, 2013 the Bank of Cyprus has signed an agreement with Citibank and Commerzbank, worth 50 mln. The EIB, he went on, will provide guaranties to the two foreign banks for financing commercial acts up to 150 mln euros. The product will be in effect by the end of this month, Papadopoulos said.

The criteria for allocating funds to Cypriot banks lie with the EIB and the banks themselves, while the money will come 100% from the EIB, the Deputy Government Spokesman concluded.