A scheme subsidising interest on loans for the refurbishment and extension of hotels and restaurants was launched by the Finance Ministry and the Tourism Secretariat this afternoon.

The €3 million scheme is spread over a 10-year-period.

In the case of refurbishments, applicants will get 1.5 percent on the loan interest, in the case of extensions one percent. In both cases the scheme covers an investment up to a maximum of €600,000.

Applications open in July but the preparatory work has to be done between now and then.

The scheme mainly targets three-star hotels but it is also open for hotels and restaurants in general, Finance Minister Tonio Fenech said.

Parliamentary Secretary Mario de Marco said this scheme was separate to the €10 million EU scheme launched earlier and the moratorium on bank loans which applied to investors who already had a loan.

The reason behind the subsidy was the economic crisis and the manner in which tourism had been affected.

Mr Fenech said the government was taking extraordinary steps because of the economic crisis. It was important to realise that opportunities came about if one recognised the need to take a step forward and not backwards in scuh circumstances, hence the importance of upgrading.