From minimum pensions of €1,088 to a fivefold increase in birth grants and the construction of 10,000 homes, commitments associated with the House Presidency agreement are now facing scrutiny over their cost, feasibility and fiscal sustainability.
By Xenios Mesaris
A 125% increase in minimum pensions, birth grant increases of up to 585%, and the construction of 10,000 housing units are the three key commitments that, according to Direct Democracy, formed the basis of its agreement to support Annita Demetriou for the Presidency of the House of Representatives.
However, only hours after the proposals became public, they came under intense public scrutiny, with the Ministers of Labour and Interior, academics and employer representatives raising concerns about cost, financing and long-term viability.
The issue has gained particular significance because the commitments were publicly linked to the agreement that led to the re-election of Annita Demetriou as Speaker of the House.
The three figures behind the agreement
Explaining his party’s support for Annita Demetriou, Fidias Panayiotou stated that Direct Democracy had presented political parties with “the three main proposals on which our election campaign was based.”
The proposals include financial support of €5,000 for a first child, €10,000 for a second child and €15,000 for a third child, the construction of 10,000 state-built homes and an increase in minimum pensions to €1,088, matching the national minimum wage.
Panayiotou said he had asked both DISY and DIKO to publish videos committing publicly to implementing the proposals. An agreement was ultimately reached with DISY, which received the votes of the party’s four MPs.
The reference is considered significant because it describes an exchange of political support in return for public commitments on specific policy measures.
Concerns over pension increases
The first reservations were expressed by Labour Minister Marinos Mousiouttas, who stated in an interview with state radio that minimum pensions would increase “substantially,” but clarified that raising them from the current €450 to €1,088, as proposed, would not be possible.
While the minister’s comments did not rule out future increases, they questioned both the scale of the proposal and the possibility of implementing it without actuarial and fiscal consequences.
Mousiouttas stressed that the Social Insurance Fund “is not an inexhaustible source of money” and that both the fund’s sustainability and overall fiscal stability must be taken into account.
Academics call for actuarial analysis
Andreas Milidonis, Professor of Finance at the University of Cyprus, told Economy Today that proposals involving more than doubling minimum pensions cannot be properly assessed without a detailed actuarial and technocratic study.
According to Milidonis, the key issue is not only whether such an increase is socially desirable, but whether it can be financed and maintained over time without affecting the sustainability of the social insurance system.
He added that evaluating such a proposal requires a clear picture of its total cost, funding sources and broader impact on the pension system.
Employer organisations raise concerns
Kypros Rousounidis, Secretary General of the Cyprus Chamber of Commerce and Industry (CCCI), declined to comment directly on the proposals, saying that no responsible position could be taken on such serious issues without prior costing and economic evaluation.
The Cyprus Employers and Industrialists Federation (OEB) also expressed concern, arguing that public debate on pensions cannot be based on “magic solutions” and warning that any substantial pension increase would require either higher contributions, a higher retirement age, or a combination of both.
Questions over housing costs
Concerns were also raised regarding the proposal to build 10,000 housing units.
Interior Minister Konstantinos Ioannou questioned where the estimated €1.5 billion required for such a project would come from, noting that government resources are limited.
He pointed out that the government is currently developing 500 apartments on state-owned land at a cost of €75 million with European funding support, raising questions about the overall cost of constructing 10,000 units.
Birth grants and demographic policy
The third commitment concerns birth grants. Currently, the maternity grant stands at €1,095.21 for a first child, €1,642.81 for a second child and €2,190.42 for a third child.
The Direct Democracy proposal would increase these amounts to €5,000, €10,000 and €15,000 respectively, representing increases of approximately 357% for a first child, 509% for a second child and 585% for a third child.
To date, no public estimate has been presented regarding the total annual cost of implementing the proposal. Analysts note that assessing such measures requires data on eligible beneficiaries, annual expenditure, funding sources and whether the measure would be universal or targeted.
A broader institutional debate
The discussion has also highlighted an institutional issue. Parliament does not prepare the state budget, manage the Social Insurance Fund or oversee housing policy, responsibilities that fall under the executive branch.
At the same time, political parties inside and outside Parliament help shape policy and influence public decision-making through alliances and parliamentary majorities.
As both Speaker of the House and leader of the country’s largest political party, Annita Demetriou’s commitments linked to the agreement have become directly associated with broader economic and social policy debates.
With reactions already emerging from ministers, academics and social partners, the next stage of the debate is expected to focus on the cost of the measures, their funding sources and how the parties involved intend to pursue their implementation.
Source: Economy Today.
Also read: Ukraine apologises over drone found off Lefkada: “We regret the incident”
