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articles | 17 July 2020 | ServPRO Accountants & Consultants

Cyprus considers incentive schemes to combat unemployment

Cyprus recently spent 500 million euros to safeguard jobs and boost liquidity amid the coronavirus crisis. In its efforts to combat unemployment in Cyprus, the government is considering incentive schemes for companies that hire jobless persons.

Since the first cases of Covid-19 infections in March 2020, authorities implemented a two-month lockdown and a support scheme for companies which entered into a suspension of business activity. The scheme was granted horizontally until June 2020, while it will apply on a scaled-down basis, mainly for the hard-hit tourism sector and associated activities, depending to the loss of turnover.

Minister of Labour Zeta Emilianidou spoke before the parliamentary committee of Labour, saying that the government aims to utilize between €12 million and €15 million from the Human Resources Development Authority’s budget for training unemployed persons and to utilize funds from the EU Social Fund subsidizing the labour cost for companies that are willing to hire jobless persons who may face problems with their employment after October 2020, when the government support schemes expire.

According to Emilianidou, the subsidy could reach 90% of the labour cost if a company employs people from the list of registered unemployed persons, on the condition that they have not fired employees or applied salary cuts. She also noted that the scheme may launch by the end of July and will be valid for November and December of the year 2020 and the first two months of 2021.

The Minister said that she is not worried by the current level of unemployment due to its association with employees in the tourism sector who continue to remain unemployed as hotels and other associated activities remain in reduced operation due to Covid-19. But she did express her concerns on the growth of unemployment after October 2020 when the Ministry’s support schemes expire.

“We are very worried from the fact that while €500 million have been paid to support employment, a company could begin layoffs when the obligation (not to let employees go) expires,” Emilianidou added.







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