CyprusEconomy

Christodoulides: Cost-of-living support measures exceed €1 billion

By: SigmaLive English

Date:

President Nikos Christodoulides has said the government has announced and is implementing more than €1 billion in support measures to address the cost of living, increase disposable income and deliver long-term solutions.

Speaking to reporters in Limassol on Tuesday, ahead of the first Forbes Cyprus Next Generation Banking & Fintech Summit, Christodoulides outlined the government’s three-pronged approach to economic support. He also said he would attend his afternoon meeting with Turkish Cypriot leader Tufan Erhürman with goodwill and a specific plan aimed at advancing the Cyprus issue.

Three pillars of economic support

Christodoulides said the government’s measures focus on immediate relief, increasing disposable income and establishing permanent solutions to structural problems.

The first pillar includes measures intended to deliver immediate benefits, such as zero VAT on selected products.

The second focuses on increasing disposable income through the tax reform, the agreement on the cost-of-living allowance (CoLA), two increases in the national minimum wage and the planned pension reform.

The third involves structural measures designed to provide lasting solutions. In the energy sector, the President pointed to developments at Vasiliko and efforts to advance the arrival of natural gas.

He said Cyprus had the financial capacity to implement support measures because of its responsible fiscal policy, while acknowledging the pressure households face from rising living costs.

More measures under consideration

Asked whether the government would introduce additional measures to tackle high prices ahead of the upcoming European Council meeting, Christodoulides said Cyprus had already taken a position at the Economic and Financial Affairs Council (ECOFIN), particularly on energy prices.

He added that the issue had also been discussed at a recent summit of Mediterranean countries in Croatia and would remain on the European agenda.

The President said the government was examining further measures beyond those already announced. Some would require approval from the European Commission, while others could be implemented without it.

Asked specifically about the possibility of eliminating the tax on diesel, he said the government was monitoring developments daily and would respond as needed.

Christodoulides added that Cyprus would present specific ideas at the European Council in Brussels over the following two days, expressing the view that a collective decision by the 27 EU member states could provide further assistance.

Christodoulides to meet Erhürman

The President said he would approach his meeting with Turkish Cypriot leader Tufan Erhürman with goodwill and a clear plan that he had shared with UN Secretary-General António Guterres and which, he said, had received a positive response from the United Nations.

“I have a duty to do everything possible to create positive and optimistic news,” he said, adding that the outcome would be assessed after the meeting.

Christodoulides said he believed that meaningful political will could lead to positive developments.

Cyprus aims to become a regional fintech hub

Asked about the prospects of turning Cyprus into a regional fintech centre, Christodoulides described the first Forbes Cyprus banking and fintech summit as evidence of the country’s direction.

He said Cyprus was gradually emerging as a hub for economic activity across different sectors, despite the challenging international environment and two ongoing wars, one of them in the region.

The President pointed to what he described as one of the strongest growth rates in Europe, unemployment at levels last seen in 2008, full employment and Cyprus’s investment-grade credit ratings.

He also highlighted the government’s budget surplus, noting that the budget submitted to Parliament was expected to deliver a surplus for the third consecutive year.

Christodoulides said the country’s economic performance enabled investment in education, healthcare, housing and the welfare state.

He added that economic growth should benefit society, arguing that responsible fiscal management had given the government room to introduce support measures rather than resort to spending cuts.

Also read: Forbes Cyprus Summit explores future of banking and fintech
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