AGP Executive Report

Energy & Cost of Living: Cyprus’ cabinet approved a €70m package cutting the heating-oil excise duty from 7.4 to 2.1 cents per litre from Nov. 1 through April 30, 2027, alongside extended electricity subsidies and wider zero VAT on essentials. Housing: Limassol’s affordable housing project is progressing, with the first 36 apartments due in early summer 2027 after minor delays. Energy Efficiency Grants: A new €20m “Save and Upgrade Homes” scheme opens for applications on Oct. 20, offering households up to €32,000 for insulation, windows/doors, solar water heaters, efficient cooling and heat pumps, plus eligible PV/battery upgrades. Banking Regulation: The Central Bank fined Banque SBA Cyprus €750,000 and Cyprus is also urged to tighten fintech oversight. Business & Trade: Cyprus and India are deepening maritime ties via a joint committee meeting, focusing on investment, education and training. EU Policy: Brussels is strengthening border security and migration controls under the Migration and Asylum Pact, with digital entry/exit checks expanding across most of the bloc. Tech & Markets: CySEC set an Oct. 30 deadline for Q3 fund management statistics.

Cyprus Fintech Oversight: Regulators and consumer safeguards need tighter coordination as digital banking, cryptoassets and fintech blur lines, with the Financial Commissioner warning people often don’t know where to turn when problems arise. China-Cyprus Diplomacy & Trade: China backs Cyprus’ international role and says it wants to jointly implement a global “trust among civilisations” initiative, pointing to growing trade opportunities. Shipping Competitiveness: Cyprus’ shipping deputy minister joined EU policymakers in Brussels to push for ports and maritime competitiveness amid energy transition, security and decarbonisation demands. CySEC Compliance Deadline: CySEC set Oct. 30, 2026 for Q3 fund management statistics submissions, warning late or faulty filings can trigger administrative penalties. Banking & Corporate Moves: Cyta CEO George Metzakis joined TechIsland’s board, while Mall of Cyprus reported 25.5% higher H1 profit to nearly €6m. Retail & Consumer Tech: Lidl is rebranding pet care under “Max & Mila’s World,” and FXBO launched a dark theme for its mobile app. Crime: Two suspects were arrested in Paphos for using stolen bank cards for online purchases.

Cyprus energy squeeze: The government has activated an emergency capacity mechanism under the electricity market law to prevent a potential 720MW supply gap by 2030, warning costs would ultimately fall on consumers. Central banking watch: The Central Bank of Cyprus kept the countercyclical capital buffer at 1.5%, a move that affects how much extra capital banks must hold in case of a downturn. Cost-of-living relief vs reality: Officials say more household support is being prepared as fuel prices keep climbing, but details on timing and eligibility are still missing. Migration pressure: Cyprus’ Deputy Migration Minister says the EU’s Migration and Asylum Pact could ease strain if other member states deliver real, timely solidarity, while noting most asylum applications are rejected as unfounded. Schengen status: Cyprus’ Schengen accession is “not on the agenda” for the next EU justice council meeting, despite ongoing work and a positive Commission assessment. Local governance & transport: Nicosia mayor Charalambos Prountzos renewed calls for a tram, arguing bus use remains far below targets due to weak infrastructure. Deep-tech push: Cyprus’ deep-tech ecosystem has topped 150 start-ups with nearly €1bn in research and innovation funding over the past decade, while RIF expands its EU state-aid tools from 3 to 10 GBER provisions. Business & trade links: Bulgaria approved an honorary Cyprus consulate in Plovdiv to boost trade and economic ties, with an honorary consul appointed. Defense industry spotlight: New Cypriot-developed drones and air-defence systems are set to feature in the Oct. 1 parade, including a dedicated UAV unit. Maritime tragedy update: Another body was recovered from the Kyrenia ferry wreckage, with DNA analysis planned for identification.

Food waste push: Lidl Cyprus renewed its “Our Strength” campaign for the International Day of Awareness of Food Loss and Waste, urging shoppers to start the next basket from what’s already in the fridge to cut household waste and costs. EU-backed entrepreneurship: At Cyprus Forum 2026, the EU’s €50m New Entrepreneurship Activity Scheme was linked to an expected 800 new businesses and 1,600 jobs, with support aimed at young people and women. Banking spotlight: Bank of Cyprus ranked 19th in Forbes’ World’s Top Performing Banks list for mid-sized lenders, the only Cypriot bank on the 500-bank global roster. Blue economy funding: Cyprus hosted the launch of MEDCONNECT, a €3.5m EU Horizon Europe project testing 15 solutions to restore Mediterranean marine and coastal ecosystems through hubs and living labs. Tourism strategy: STEK said Cyprus must use AI to raise quality and value per visitor, extend the season and differentiate experiences. Cost-of-living politics: AKEL protested over living costs as the government pointed to zero VAT on key basics, a 5% electricity VAT rate for low-income households, and fuel tax cuts, while more targeted measures are being prepared. School air-conditioning scrutiny: The education ministry hit back at the auditor-general’s warning that safety steps were bypassed in public-school AC installations, insisting safety is “non-negotiable.” Aviation links: KLM confirmed its winter Larnaca–Amsterdam service continues into the season, with broader network connectivity and winter route capacity. Corporate updates: Cyprus Cement H1 profit rose to €5.4m on stronger Vassiliko contribution; Cyprumed advanced as MSD started a Phase I trial using its oral delivery technology.

Tourism Strategy: Stek says Cyprus tourism needs a faster shift toward quality, higher value per visitor, longer seasons and more tech/AI use, warning that the sector’s heavy reliance on air connectivity makes flexibility and tighter state-private coordination crucial. Cost of Living & Energy: Finance Minister Makis Keravnos promises a targeted package to ease rising living costs, while separate reporting flags heating-oil and fuel price pressure this winter, with heating-oil tank costs potentially jumping by about €650. UN Cyprus Talks: UN envoy María Ángela Holguín warns the “window of opportunity” for restarting Cyprus negotiations is closing, citing lack of political will and stalled confidence-building steps after New York talks. Pension Reform: Labour Minister Marinos Mousiouttas says changes to the first pillar of pension reform may come after legal vetting, aiming for rollout from Jan 1. Shipping/Business Risk: A report on Curaçao’s gaming licensing breach highlights how Cyprus-based HSJ Consult was involved in “suitability” assessments, raising questions about external contractors’ roles in regulated processes. Safety Incident: 21 people were rescued after a boat capsized off Limassol’s Dasoudi area, with all later cleared after medical checks.

Maritime & Trade: Cyprus is sending a shipping competitiveness push to Brussels as the EU maps priorities for ports and the maritime sector, while Cyprus also joins a new Liberia–India-led UN platform to boost safety and security for shipping and seafarers. Banking & Payments: Bank of Cyprus has added direct Indian rupee (INR) transactions, aiming to simplify cross-border payments for Cyprus–India trade and remittances. Energy & Costs: Diesel in Cyprus has hit a new record above €2/litre, with fuel-station owners warning of further increases and renewed calls for VAT or tax cuts. Digital Inclusion: CYENS’ “Digital Kin” platform is rolling out free smartphone training for seniors and remote users, with step-by-step guides in Greek. Health & Society: The Cyprus Society of Cardiology launches a World Heart Day prevention drive ahead of World Heart Day on Sept. 29. Education & Research: The University of Nicosia, FWI and UNIC Athens sign a five-year cooperation framework focused on financial wellbeing research for public policy. Business & Governance: Housing Minister David Lee attacks the Housing Development Corporation as a “slush fund,” citing alleged sole-tender awards tied to former PNM-linked figures. Tourism Strategy: Pasyxe urges Cyprus to make AI and digital transformation central to tourism competitiveness, calling for coordinated planning and incentives. Regional Diplomacy: UN envoy Maria Angela Holguin warns the “window of opportunity” for Cyprus talks is closing as tensions in the eastern Mediterranean rise.

Cyprus Peace Talks: Cyprus’ Presidency says the “basis for a settlement” and the negotiating acquis for the Cyprus problem remain unchanged after President Nikos Christodoulides’ UN meetings, with the UN Secretary-General responding positively to proposals and reaffirming reunification as the top priority. Energy Interconnector: The Greece–Cyprus electricity link via Crete is moving toward a new phase as seabed surveys are set to resume, with French-led steps and tight timelines raising the stakes amid ongoing Turkey-related friction. Regional Education Ties: Cyprus and the Philippines signed a higher education and research cooperation deal on the sidelines of the UN General Assembly, aiming to deepen teaching, student exchange and research links. Cost of Living Pressure: AKEL urges immediate government action on rising living costs, citing extra state revenue and calling for targeted support such as transport and heating subsidies, plus VAT and fuel-pricing measures. Banking & Markets: New data points to Cyprus bank deposits and lending rising in August, while the competitive electricity market marks its first year. Tourism & Travel: easyJet announced new Larnaca–Newcastle services for 2027, while Cyprus’ labour and golden-visa policy debates continue to shape investor and workforce expectations.

Energy & Geopolitics: Cyprus and Israel will keep working on the shared Aphrodite–Ishai gas deal in early October, with talks at technocratic level and legal advisers aiming to settle how the reservoir crosses into Israel’s EEZ. Power Interconnector Watch: The Greece–Cyprus electricity link via Crete is moving toward a key next step as seabed surveys are set to restart, with Athens, Paris and Nicosia racing to issue the required NAVTEX while reading Ankara’s position. Cost of Living Pressure: AKEL urges immediate government action on rising living costs, citing about €200m in extra 2026 state revenue and calling for targeted support such as transport and heating allowances plus relief on vehicle circulation fees. Tourism–Farming Link: Agriculture Minister Christodoulos Senekis says Ayia Napa should better connect tourism with local farmers, fishermen and livestock producers as the festival runs Sept. 25-27. Labour Market Rules: Cyprus is tightening scrutiny on third-country work arrangements as unions warn temporary agencies can undermine labour rights, while the government uses bilateral mobility deals to address shortages. Public Finance: Budget documents point to higher public-sector staff and pension costs in 2027 than first indicated, with knock-on pressure on the wage bill. Retail Expansion: Jumbo says it has identified sites for new stores, with openings expected in Cyprus and Romania in 2027-2028, alongside major logistics investments in Romania and Greece.

Aphrodite-Ishai Gas Talks: Cyprus and Israel are pushing technical negotiations on the cross-border Aphrodite–Ishai reservoir, aiming to wrap an agreement before end-October, with meetings set for the first half of October. Energy Market Watch: Cyprus’ competitive electricity market marked its first year on Oct. 1, but a fiscal watchdog-style critique says prices remain among Europe’s highest and solar savings aren’t translating into lower bills. Public Pay Pressure: Despite plans to cut civil service headcount, 2027 budget figures point to a hidden rise in public-sector staff and pension costs—about +4.1% after adjusting for one-off items. Cost-of-Living: Another inflation squeeze is expected as heating oil prices keep climbing and higher rates feed through to household and business costs. Protected Foods Push: Athienou’s bread and loukoumi moved closer to EU Protected Geographical Indication status after Cyprus forwarded applications to Brussels, with a decision expected in 2027. Banking Snapshot: Cyprus bank deposits and lending both rose in August, supporting a steadier credit backdrop. Tourism Demand Signal: Anna Vissi’s Athens concert is already boosting travel and hospitality demand for visitors, including Cypriots facing sharply higher flight prices.

Industrial Relations: Cyprus unions say the government’s stance is shifting on pay increases for hourly paid state workers after talks with Finance Minister Makis Keravnos, with a key meeting with President Nikos Christodoulides due Monday. Energy & Deals: Cyprus and Israel will push technical talks on the Aphrodite–Ishai gas reservoir in early October, aiming to close an agreement before end-October. Food & EU Trade: Athienou bread and loukoumi have been formally submitted for EU Protected Geographical Indication status, with a decision expected in 2027. Banking: Central Bank data shows Cyprus deposits and lending both rose in August, with deposits up to €59.3bn and loans up to €28.5bn. Aviation & Tourism: Wizz Air launches a new Larnaca–Madrid route, adding a third Spanish connection as it expands Cyprus connectivity. Education & Social Policy: A new PISA report finds migrant-background students outperform native Cypriots in Cyprus across reading, maths and science, challenging a long-held local belief. Electricity Market: A one-year review of Cyprus’ competitive electricity market says savings are not yet translating into lower consumer bills and competition remains limited. Business Expansion: Greek retail giant Jumbo reports higher H1 profit and plans a new Cyprus store in 2027. Geopolitics: Turkey’s President Erdogan escalates rhetoric with Israel at the UN, while Cyprus’ regional positioning remains tied to Eastern Mediterranean energy and security.

Defence Budget Boost: Cyprus has earmarked €1.28bn for defence strengthening over the next three years, with “defence expenditure” rising to €430.15m in 2027 from €176.8m in 2026, as the island starts drawing on EU Safe funding. Customs Crackdown: A senior Cyprus customs official, Eliza Fantidou, is chairing an international tobacco-illicit trade protocol body as the framework marks eight years in force, warning the problem evolves faster than any single country can tackle it. Regional Diplomacy: Cyprus, Greece and Egypt held fresh talks in New York ahead of their next trilateral summit, while Cyprus FM Constantinos Kombos met India’s Jaishankar to reaffirm opposition to illegal occupation and stress UNCLOS. Air Connectivity: easyJet says it will add 18 routes from 10 UK airports in summer 2027, including new links to Cyprus such as Newcastle–Larnaca. Sports & Business Interest: A second Israeli basketball club, Hapoel Jerusalem, has approached Cyprus about hosting EuroLeague home games, following Maccabi Tel Aviv’s request. Local Economy & Infrastructure: Cyprus’ foreclosure framework is cited as supporting financial stability, while loan growth is reported to be picking up as deposits reach €59.3bn.

Energy & Geopolitics: Turkey warned that the Greece-Cyprus-Israel Great Sea Interconnector must be coordinated with Ankara before any seabed cable work, reviving maritime boundary tensions around the EU-funded power link. Cyprus-Israel ties: As Israeli Ambassador Oren Anolik prepares to leave, the Embassy launched a digital bilingual book exploring historical links between Cypriots and Jews. UN diplomacy: Greek PM Mitsotakis used the UN General Assembly to call for dialogue with Türkiye while stressing that the Cyprus issue remains a “litmus test” for UN credibility. Cyprus energy development: President Christodoulides met ExxonMobil to push for faster development of the Glaucus and Pegasus gas discoveries, aiming for a Plan of Development and Production and a Final Investment Decision. Shipping & safety: Turkish Cypriot authorities say they were not informed about a crack found on a Kyrenia ferry before it sank, as a negligence case continues. Cost of living: Diesel hit a historic high in Cyprus at €1.997/litre, with fuel groups again calling for a VAT cut. Banking: Alpha Finance-AXIA raised its Bank of Cyprus target to €12.30, citing strong profitability and shareholder returns. Business & tech: Logicom reshuffled top management, appointing Anthoulis Papachristoforou as CEO for day-to-day operations. Telecom: Primetel bundled Bitdefender mobile security with eligible 5G plans. Housing policy: Cyprus launched a scheme allowing homeowners to add a storey or extension (up to 150 sq m) to house family members, even when density limits are already reached. EU trade & logistics: Cyprus ranked third in the EU for dangerous goods in road freight in 2025, at 7.5% of tonne-kilometres.

Golden Visa Tightening: Cyprus plans to review about 12,000 golden passports issued since 2013 and tighten the “golden visa” scheme ahead of Schengen entry, with migration services also moving toward online permit renewals and a new system to track third-country nationals. Property Market Heat: Residential property prices in Cyprus rose 8.5% in Q2 2026, driven largely by foreign demand, while sales contracts jumped 15.4% year-on-year and building approvals surged. EU Funds Risk on Makarios Ave: The transport ministry opposes changes to Nicosia’s Makarios Avenue that could trigger repayment of EU co-financing, after MPs raised concerns about the avenue’s vehicle rules. Public Health Push: Cyprus faces a major cardiovascular burden, with one in three people at risk of dying from heart disease; a nationwide awareness campaign runs ahead of World Heart Day. Energy Costs Watch: A reported US plan to halt diesel exports for 90 days could tighten European supplies and push prices up, with potential knock-on effects for Cyprus. Regional Security Talks: Egypt, Greece and Cyprus defence ministers met in Cairo to strengthen trilateral military cooperation amid shifting Eastern Mediterranean risks.

Aphrodite Gas Push: President Christodoulides met Chevron executives at the UN, urging “development” of Cyprus’ natural gas fields and faster steps toward a development and production plan. Investor Confidence: EY’s 2026 survey says 83% of international investors view Cyprus as attractive for FDI, with most planning to expand. Retail & Jobs: Lidl Cyprus rolled out its first Store Co-Manager cohort after 1,700 hours of training for 22 staff, aiming to strengthen daily store operations. Local Industry: Cystat data shows sales of locally produced industrial goods up 3.7% to €4.77bn, led by halloumi, bakery products and pharmaceuticals. Infrastructure & Mobility: Nicosia’s Makarios Avenue row continues as the mayor warns EU funding could be jeopardised, while a €21m Pedieos river plan would split pedestrian and cycling lanes. Business & Trade Links: Cyprus and Malta businesses explored new partnerships in tech, financial services and cyber security. Sports & Tourism: Cyprus topped a UK-linked autumn-break ranking for Israeli travellers, with Ayia Napa, Limassol, Larnaca and Paphos taking the top four spots. Crime Watch: Police arrested a man over a €89,000 “Prince of Gabon” scam in Famagusta.

Cyprus–Egypt–Greece Defence Push: Egypt, Greece and Cyprus’ defence ministers met in Cairo to deepen trilateral military cooperation, building on the Alamein leaders’ summit and agreeing a joint statement on security coordination in the Eastern Mediterranean. Nicosia City Centre Tensions: A Nicosia business and residents’ committee is calling for Mayor Charalambos Prountzos to resign over the handling of pedestrianisation plans for Makariou Avenue, including criticism of hiring PwC with public funds and concerns about student accommodation impacts. S&P Credit Upgrade: Cyprus has regained an A rating from S&P, a milestone that closes a long downgrade cycle tied to the banking crisis era. Energy/Infrastructure Watch: UK plans to buy a portable air-raid siren system for RAF Akrotiri, while Cyprus’ broader regional security backdrop continues to shape defence and energy priorities. Tourism Demand Pressure: Flight prices between Cyprus and Athens have surged ahead of Anna Vissi’s OAKA concert, with some fans reconsidering travel costs. Eurobank Expansion: Eurobank is looking beyond its current footprint, including plans for a representative office in Abu Dhabi (spring 2027) as part of its international growth strategy.

Energy & Investment Diplomacy: President Nikos Christodoulides met Chevron executives in New York to push for faster progress on the Aphrodite gas field, aiming for an early final investment decision and linking the project to Cyprus-Egypt energy cooperation. Maritime Cooperation: Cyprus and Liberia signed an MoU to boost maritime and port security, including scholarships for Liberians in the sector. Fuel Costs Pressure: Cyprus’ petrol prices jumped 6.2% in August, with consumer protection warning further rises are likely as shipments get pricier; the finance ministry says it is monitoring and may act. Property Market Snapshot: Landbank Analytics puts H1 2026 resale activity at €727.2m across 3,202 transactions, with Limassol leading in total value and price per square metre. Agriculture & Food: Organic farming reached 8.6% of cultivated land, surpassing the 2027 target, with €22m support via the CAP plan. Business Climate & Compliance: Tax refunds move fully digital from Oct 5 via Tax For All and CY Login with IBAN certificates, while MPs also begin reviewing gender-balance rules for listed company boards. Tourism Watch: August arrivals fell 3.3% year-on-year, with UK down but Israel up 28.4% amid regional turmoil.