Coronavirus: Cyprus will need to borrow from the European Union

The Cypriot finance minister announced it last week. Cyprus will be the first country to call on European Union aid using a European Stability Mechanism (ESM) line of credit, without waiting for the other funds presented by Brussels on Wednesday, not yet approved. The MES was set up in 2012 at the heart of the sovereign debt crisis. The euro area member states have agreed to reactivate it to deal with the effects of the pandemic. Given the exceptional nature, the access conditions have been relaxed, without imposing a drastic counterpart. The support must be used for expenses linked to the crisis.

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Very dependent on tourist activities (direct contribution of 22% to GDP), the small Mediterranean island has suffered from general confinement and the closing of borders. In particular with Great Britain and Russia, where a large share of visitors comes from. Tourism receipts collapsed in March

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