Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure CY-2021-1/1830 – measures in Cyprus
|Country||Cyprus , applies nationwide|
|Time period||Open ended, started on 01 January 2021|
|Context||COVID-19, European Semester|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Direct subsidies (full or partial)
|Author||Loucas Antoniou (INEK) and Eurofound|
|Measure added||09 April 2021 (updated 05 May 2021)|
The scope of the measure is to provide financial support to businesses and self-employed persons that have been negatively affected by the pandemic and the measures taken by the government against the spread of COVID-19 in the community. The financial support provides the covering of the running or operational costs of businesses such as rentals of business units, debts instalments or other business operational costs. The scheme is approved by the Cabinet in January 2021 and regulated by the Ministry of Finance.
The beneficiaries of the sponsorship scheme are businesses and self-employed persons subjected to VAT undergoing a 35% turnover reduction, in compare with their 2019 turnover, due to the restrictive measures taken by public authorities for the fighting of the pandemic. Businesses that have been established in 2020 undergoing a 35% turnover reduction in compare with their equivalent average turnover are also considered beneficiaries of the sponsorship.
The eligibility criteria for the participation of businesses are:
The coverage of the sponsorship is calculated based on a special algorithm considering the number of weeks that the business is under part or full suspension or negatively affected by the pandemic due to the nature of its economic activity and the percent of the weekly turnover of the business in 2019 or the average turnover of the newly established businesses.
The maximum grant of support may not exceed €300,000 and €800,000 for Hotels and the minimum €1,000.
The budget available for the sponsorship scheme is €200 million and it is estimated that 30,000 businesses will be granted with the sponsorship.
Currently, there is no information on the effectiveness of the sponsorship scheme.
|Does not apply to workers||Applies to all businesses||Does not apply to citizens|
National Recovery and Resilience Facility
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Consultation through tripartite or bipartite social dialogue bodies||Consultation through tripartite or bipartite social dialogue bodies|
Social partners' role in the implementation, monitoring and assessment phase:
The sponsorship scheme emerged after the reactions of social partners – trade unions, employers’ organization, SMEs – and political parties at a national level to earlier measures of the government directed to businesses, which were considered inadequate. The covering of operational costs of businesses was a demand of social partners since the first wave of the pandemic in 2020, which influenced a public debate among them and the government. Social partners at the peak level participated in the designing phase of the scheme thought the implementation and monitoring is regulated by the Ministry of Finance.
Social partners appeared satisfied upon the announcement of the scheme by the Ministry of Finance. Some reactions have been also observed mainly by the leading opposition party suggesting that the rental of businesses units, particularly for SMEs that have negatively affected by the pandemic, which represents a large percentage of the operational costs of businesses should be subsidised separately and directly by the government.
Eurofound (2021), State sponsorship scheme for businesses and self-employed people, measure CY-2021-1/1830 (measures in Cyprus), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/CY-2021-1_1830.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.