AGP Executive Report

Cyprus Business & Economy: Cypriot business magnate Nicos Shacolas, founder of the CTC Group and a major employer and philanthropist, has died aged 98, with the group pledging to continue his work. Capital Markets: CySEC chairman George Theocharides says retail proprietary trading is not an ESMA priority, suggesting limited near-term regulatory momentum for the sector. Local Business & Growth: KPMG Cyprus says Paphos is broadening beyond tourism into real estate, education, tech and professional services, supported by infrastructure upgrades and overseas buyers. Macroeconomy: The Central Bank of Cyprus cut its growth forecasts for 2026 and 2027, citing Middle East war risks and warning downside factors tied to US-Iran developments. EU Policy & Health Industry: EU lawmakers unveiled the details of the new European critical medicines law, including “strategic projects” to boost EU manufacturing capacity and secure supply. Social Impact: Police figures show 17 femicides in Cyprus between 2020-2025, with 2026 already recording attempted femicides.

Monaco bombing links to Ukraine scam networks: A parcel bomb in Monaco on June 29 left Ukrainian tycoon Vadym Yermolaiev and his family seriously hurt, with prosecutors calling it “attempted murder” and investigators hunting a suspect; reports point to possible links to Dnipro-based online fraud call centres and competing theories continue as the case develops. EU politics with Cyprus in the spotlight: Ireland officially starts its EU Council presidency, with Zelenskyy in Dublin and EU leaders pushing to open up to five more Ukraine accession negotiation clusters soon; Cyprus’ prior presidency is credited with launching the first cluster. Turkey-EU friction over Cyprus: Turkish FM Hakan Fidan accused Cyprus of blocking progress on modernising the EU-Turkey customs union, saying the “Greek Cypriot side” is slowing decisions despite broad EU support. Cyprus economy watch: The Central Bank of Cyprus cut growth forecasts amid Middle East risks and said inflation has risen to 4%, while food prices continue to squeeze households. Banking deal in focus: Freedom Holding Corp said Turkish regulators approved its acquisition of Turkish Bank, a key step in its expansion plan. Local business & regulation: Cyprus police warned of a surge in phone-scam calls using local numbers, urging residents not to share banking details. Energy developments: ExxonMobil and QatarEnergy declared Cyprus gas fields “marketable,” while an energy expert warned Cyprus may be making “continuous concessions” to multinationals. Corporate leadership: PwC Cyprus named Andreas Yiasemides as CEO from July 1, replacing Philippos Soseilos. Security at ports: “Port Shield 2026” tested counter-terror response at Limassol port using real operational resources.

Digital Transformation: CITEA’s 5th Digital Cyprus Conference in Nicosia put AI at the centre of the next wave of business growth, with Deputy Minister Nicodemos Damianou stressing competitiveness through digital adoption. Markets & Education: The Cyprus Stock Exchange honoured top economics student Stylianos Savva from the University of Cyprus with a €500 award in memory of former CSE chairman Akis Cleanthous. EU Politics & Business Impact: Ireland took over the EU Council Presidency on July 1 with an agenda focused on competitiveness, values and security, while estimates put its cost at about €293m—far above Cyprus’ current presidency. Cyprus Economy Watch: Cyprus improved in the IMD World Competitiveness Yearbook, ranking 42nd out of 70, but concerns remain over fiscal discipline and public policy implementation. Banking & Credit Quality: Eurobank unveiled a €1bn “Banking Forward” digital and AI-led transformation, while CBC data showed loans managed outside Cyprus’ banking system rose by €256m to €19.61bn, with non-performing balances still high. Cost of Living: Trojan Economics reports food prices in Cyprus are rising faster than overall inflation again, squeezing households. Tourism Stability: Tourism deputy minister Kostas Koumis told parliament that May and June data suggest stabilisation after Middle East tensions, though 2026 won’t be a record year. Reunification Support: The European Commission reiterated EU backing for Cyprus reunification via the Green Line and Aid Programme, citing record authorised crossings and €33.7m in 2025 support. Security & Business Risk: A Monaco parcel bomb injured a Ukrainian-born tycoon with Cypriot nationality, with authorities treating it as attempted murder and running a manhunt—an episode that underlines how cross-border business links can turn into real-world risk.

Monaco Bombing Fallout: A parcel bomb in Monaco has triggered an attempted-murder investigation after a Ukrainian tycoon and family were seriously injured; authorities say the case is not being treated as terrorism and a suspect fled toward France, while Ukraine’s foreign ministry says it is in contact with Monaco and identifying the injured. Cyprus Energy Milestone: Cyprus, ExxonMobil and QatarEnergy signed a Declaration of Commerciality for the Glafkos and Pegasus gas fields, moving them into development with a possible final investment decision in 2029 and production targeted for 2033. EU Presidency Wrap: Cyprus officially ends its EU Council presidency, with leaders citing major deals on health, travel rights and migration. Greenwashing Crackdown: Parliament began discussing a bill to curb greenwashing, shifting the burden of proof to vendors for misleading eco-friendly claims. Water Pressure on Farming: MPs warned water policy could push farmers out of agriculture, questioning dam water extensions to golf courses and irrigation allocations. CSE Market Signals: The Cyprus Stock Exchange kept trading warning markers on five firms after auditor reviews and adjusted markers for others. Occupied North Digital Push: Türk Telekom plans a $100m upgrade in occupied Cyprus, including fiber and 5G rollout. Shipping Agenda: Cyprus’ shipping deputy minister met Polsteam Shipping to discuss maritime priorities and Cyprus’ role as a shipping hub.

Cyprus Tourism: Cyprus tourism revenues fell 35.1% year-on-year in April to €197.5m, with the Iran war blamed for driving away visitors and hitting arrivals sharply from March onward. Housing & Property: The Central Bank says apartment prices in Cyprus rose 10.8% in Q1 2026, with foreign demand and higher construction costs lifting the House Price Index 7.5%. Labour Market: Cyprus recorded 63 occupations with labour shortages in 2024, with the biggest gaps in healthcare and digital technology, while Paphos hotel occupancy is reported about 20% lower than last year. Energy Policy: An energy expert warns Cyprus lacks a coherent long-term energy strategy, citing competing pressures from costs, climate targets and geopolitics. SME & Compliance: The Cyprus Chamber of Commerce and Industry invites SMEs to a European Commission survey on occupational safety and health in subcontracting chains ahead of the Quality Jobs Act. EU Rules Impacting Businesses: New EU packaging rules will require takeaway outlets to accept reusable customer cups from next February, but Cyprus still needs enforcement details. EU Governance: EU lawmakers also set a 30 June deadline for gender balance targets on company boards, while the Council moves to strengthen farmers’ bargaining power in the food supply chain. Business & Finance: CBC keeps the countercyclical buffer at 1.5%, and bank deposits in Cyprus rose to €58bn after a monthly increase. Developments Beyond Cyprus: A major explosion in Monaco injured a Ukrainian businessman with Cypriot citizenship, underscoring how Cyprus-linked individuals remain in international headlines.

Tourism Shock: Cyprus tourism revenue slid 35.1% year-on-year to €197.5m in April 2026, as Middle East conflict hit demand, with arrivals down to 303,031 and average spend falling to €651.77. Banking Pulse: The Central Bank of Cyprus kept the countercyclical capital buffer at 1.5%, while May data showed deposits up €343.8m to €58bn and loans rising €260.3m to €28.1bn. EU Rules for People on the Move: The EU Council gave final approval to stronger enforcement of passenger rights, with Cyprus Transport Minister Alexis Vafeades calling it more transparent and consistent. Digital Safety: Cyprus Deputy Minister Clea Papaellina backed EU Council conclusions to better protect girls from online violence, including cyberstalking, harassment and non-consensual image sharing. EU Funding Framework: Cyprus-linked EU budget talks moved forward as the Council agreed a partial position on the 2028–2034 multiannual financial framework, including cohesion funds—though without allocations yet. Energy/Industry Support: The EU Council also cleared the coal-and-steel research fund reform, extending it to 2034 with up to €120m annually. Property Market: Apartment prices in Cyprus hit a record in Q1 2026, with the apartment index at 127 (+11.4% y/y) outpacing houses. Healthcare Leadership: Hadassah Medical Center Limassol named George Zachariades as CEO ahead of its opening. Local Infrastructure: A key Larnaca road to Livadia won’t be ready until 2031, despite a 2026 target in the local plan. Labour Market: Cyprus recorded 63 occupations with labour shortages in 2024, with gaps concentrated in healthcare and tech.

Pension Reform Under IMF Scrutiny: The IMF warns Cyprus that ageing-related pension and health spending could rise above 4% of GDP by 2050, urging the government to protect fiscal space as it prepares the second phase of pension reform. Tax Crackdown in Tourist Areas: Cyprus’ Tax Department will start surprise checks and can suspend business operations for unpaid taxes or missing receipts, with early focus on summer-heavy sectors like restaurants, bars and sea excursions. Road Safety Rules Hit Deliveries: New motorcycle licensing rules from July 1 may disrupt food delivery work for learner riders, with more than 1,000 applicants reportedly waiting for test dates. SME Financing Push: Cyprus is set to launch a new fast-tracked financing body for SMEs and startups as part of reform efforts. Banking and Policy Debate: Opposition is again pushing for an additional tax on banks, arguing it could support borrowers and vulnerable groups as interest rates rise. Private Healthcare Upgrade: Hadassah Medical Center Limassol opens July 1 with a care pathway model and access to Hadassah specialists in Israel, including advanced imaging and multidisciplinary teams. World Environment Day at Lidl Cyprus: Lidl Cyprus relaunches its environmental responsibility campaign, citing measurable marine clean-up results and early-years education support. Cyprus in EU Defence Talks: EU officials discuss a “playbook” to strengthen mutual defence under Article 42.7, highlighting Cyprus’ role during its EU Council presidency.

Tax enforcement: Cyprus Tax Department will start surprise on-site checks in tourist areas, with powers to suspend businesses over unpaid tax, missing receipts/invoices, and large debts. Transport & labour: New motorcycle licensing rules from July 1 could disrupt food delivery work, forcing learner riders to be supervised by an instructor or pass testing. Banking & cost of living: Opposition is again pushing for a new tax on banks as ECB rate hikes squeeze borrowers and boost banks’ central-bank liquidity income. Energy transition: Cyprus solar households face a major shift as net billing replaces net metering from 1 Jan 2026, changing the economics of rooftop PV. EU & trade: A new €3 duty on certain non-EU goods (e-commerce parcels up to €150) may raise costs for Cyprus consumers as Temu/Shein-type imports face more charges. Cyprus in defence talks: EU officials say Brussels is drafting a mutual defence “playbook,” highlighting Cyprus’ Article 42.7 push during its EU presidency. Local governance: Power outages hit parts of Nicosia due to technical faults. Business & investment: Walk In Builders & Developers inaugurated premium apartments “Nirvana” in Mangaluru, while Cyprus’ defence firms showcased advanced systems at Eurosatory in Paris.

Power & Utilities: Power outages hit parts of Nicosia after technical faults, with Anthoupoli, Lakatamia and Pano Deftera affected and restoration expected by noon. Fuel Costs: Cyprus extended its reduced motor fuel excise tax until Sept. 17, keeping the 8.33 cents per litre cut and estimating €15.5m in consumer benefit. Telecom Competition: The debate over a third telecom operator is back on the agenda, with CG, WorldLink and UTL eyeing market entry and renewed competition. Water & Infrastructure: Desalination plans are facing fresh local pushback, with residents questioning the scale and permanence of a proposed mobile unit in Mazotos. Governance & Accountability: EAC unions accuse board chairman George Petrou of governance breaches and unilateral interference, calling for an extraordinary board meeting. Legal Developments: Police investigations into the Sizopoulos and Fedonos cases are nearing final stages, with files expected to move to the Attorney General for next steps. SME Finance: Cyprus is set to launch a new financing body for SMEs and startups under fast-tracked reforms. Property & Housing: Cyprus revives an affordable land plots scheme after a 15-year pause as pressure on rents and prices continues. EU Context: Cyprus-related diplomacy also features in EU/UN coordination discussions, while Ireland’s upcoming EU presidency agenda is framed around competitiveness, digital/tech rule changes and energy policy.

SME Finance Push: Cyprus is set to launch a new financing body for SMEs and startups under fast-tracked reforms, aiming to improve access to funding as the business environment tightens. EU Anti-Fraud Cooperation: Cyprus signed a cooperation deal with OLAF to give the anti-fraud office secure access to company registers and beneficial ownership data, boosting efforts against fraud and corruption. Tourism Watch: Hotel bookings are improving, but the sector still faces an average loss of around 20% for the rest of the season, with operators hoping easing tensions will lower air-fare pressure. Property Market Signals: Cheaper mortgages and foreign buyer demand are supporting rising apartment prices, with the market continuing an upward trend. Agriculture Under Strain: Sheep and goat farmers are demanding emergency aid over feed costs and movement restrictions tied to foot-and-mouth disease controls, while the agriculture ministry reviews additional support requests. Waste Policy Deadline: A landfill tax bill is under discussion in parliament as Cyprus risks losing €23m in EU funding if reforms miss deadlines. Security & Justice: Police arrested a man over the seizure of 6.05kg of dried poppy bulbs in postal parcels, with two other suspects already detained. Defence Recruitment: Interest in Cyprus contract soldiers is rising after reforms improved pay and career progression prospects.

SME Financing Push: Cyprus will launch a new public development body, the Cyprus Business Development Organisation, to plug funding gaps for SMEs, startups and self-employed people, offering loans, guarantees, equity tools and grants under state-aid rules, with a fast-tracked parliamentary timetable ahead of a July 9 deadline to avoid losing Recovery and Resilience funding. Affordable Land Returns: Cyprus is reviving an affordable state land plots scheme after a 15-year pause, with 135 plots planned via the Interior Ministry and the Cyprus Land Development Corporation, including areas in Nicosia, Limassol, Larnaca and Paphos, priced at about one-third of market levels pending permits. EU Islands & Competitiveness Agenda: EU officials unveiled strategies to tackle the “cost of insularity” for islands and coastal communities, while Ireland’s upcoming EU presidency focus includes competitiveness, a deeper single market, lower energy costs and digital/AI transformation. Energy Grids Overhaul: EU energy ministers agreed a negotiating position to modernise power networks, aiming to speed cross-border infrastructure planning and permitting to support electrification and decarbonisation. Banking Outlook: Roemer Capital upgraded Bank of Cyprus to “buy” and reaffirmed a positive view on Eurobank, citing fading geopolitical risks and resilient growth. Tourism & Markets Roundup: Cyprus Business Now highlights banking, tourism and corporate updates alongside market sentiment. Environment & Fisheries: Cyprus removed over 100 tonnes of toxic pufferfish under a subsidy scheme, as Greece considers similar incentives to curb the invasive species.

Fuel Relief for Drivers: Cyprus extended its fuel tax cut until Sept. 17, keeping an 8.33 cents per litre discount (with VAT) to cushion households and businesses from volatile global oil prices. Tourism Watch: May tourist arrivals fell 4.9% year-on-year, but the Deputy Ministry of Tourism said the impact is “manageable” and highlighted the resumption of Kuwait flights as a boost for demand. Anti-Drug Push: Cyprus’ Anti-Narcotics Service is investigating a possible new narcotic after seizures of more than 58kg of dried opium poppy pods in five days, with 13 arrests so far and TikTok reports helping trigger the probe. Addiction Concerns: Experts warn drug and behavioural addictions are rising, with children as young as 14–15 entering treatment earlier than before. Tech Cost Pressure: Apple raised prices on MacBooks and iPads globally due to a sharp memory-chip shortage, a move that could feed through to Cyprus buyers. 1974 Missing Remains: Cyprus is starting advanced DNA testing on chemically treated remains from the 1974 conflict, funded with €1m, aiming to finally identify cases long considered “unreadable.” EU Crime Outlook: Europol says organised crime networks are evolving fast, increasingly online and AI-enabled, and often rely on legal business structures to survive.

EU Trade & Tariffs: The EU Council formally adopted regulations to implement EU-US Joint Statement tariff commitments, removing remaining duties on US industrial goods and extending suspensions on lobster imports, with safeguard mechanisms in place. Construction Costs: Eurostat data show Cyprus residential construction prices hit a record high in 2025, up 18% since 2021, as building costs rise across the EU. Healthcare Staffing: Cyprus is short about 600 nurses at state hospitals; the health minister floated a tightly controlled hiring route for up to 10% of staff from non-EU countries, with Greek requirements and two-year permits. Climate & Agriculture Risk: An ECB study warns compounding heatwaves and droughts are increasingly frequent in Mediterranean regions including Cyprus, with agriculture hit hardest. Coastal Fishing Policy: Oceana urged Cyprus and EU leaders to protect small-scale fishers via preferential access areas and tighter controls on bottom trawling. Tech & Investment Outreach: Cyprus promoted its innovation ecosystem at London Tech Week 2026 and hosted a London panel on the space economy. Business Networking: Cyprus Procurement’s founders launched a free “News Feed” social network for local businesses, aiming to become a LinkedIn-style hub. Tourism Demand: UBS says resilient tourism and corporate lending are supporting Greek lenders, with Middle East tensions not yet denting arrivals.

Road Safety & Enforcement: Cyprus will pilot AI-powered cameras to catch drivers using mobile phones, with Transport Minister Alexis Vafeades saying distraction is a key cause of collisions; the plan also shifts camera vans into urban centres and adds fixed cameras to calculate average speed on motorways. Healthcare Workforce: Cyprus faces a shortage of about 600 nursing staff at state hospitals, with the health ministry proposing tightly controlled hiring of up to 10% of staff from non-EU countries under strict conditions. EU Trade & Tariffs: The EU Council formally adopted regulations implementing EU-US tariff commitments, removing remaining duties on US industrial goods and extending safeguard mechanisms through 2029; Cyprus’s Michael Damianos said openness will be paired with protections for local jobs. Consumer Costs: Customs rules in Cyprus will remove the €150 low-value parcel exemption for non-EU online orders, replacing it with a €3 charge per item category (plus VAT), affecting Temu and Shein-style shopping. Local Business & Mobility: Roadworks closed Kritis Street and Philippiados Street in central Nicosia, triggering severe congestion and reduced access for businesses during summer trade. International Support for Patients: Cyprus will create a dedicated role at its embassy in Paris to help Cypriot patients and families receiving state-subsidised treatment in France. Crypto Deadline: Cyprus crypto firms have just six days left to secure MiCA authorisation, merge, scale down, or wind down before the EU rules fully apply. Fuel Relief: Parliament extended Cyprus fuel tax relief until end-August, keeping reduced excise rates in place to ease summer price pressure. Transport Oversight: A new parliamentary transport committee will prioritise school bus safety after an Audit Office report found high failure rates in bus inspections and certification. Cybercrime Warning: Police warned of phishing emails impersonating the tax department, urging people not to click links or share passwords/banking details via email. Property & Construction Costs: Cyprus residential construction costs hit a record high in 2025, while apartment prices rose 10.8% year-on-year, adding pressure to the housing market.

Anti-corruption push: Cyprus’ Justice Minister Costas Fytiris warned organised crime is “already watching us” and outlined a legislative agenda including a money-laundering harmonisation bill aimed at asset confiscation. Airspace tensions: The government has written to UN chief António Guterres complaining of 520 aerial and 23 naval violations in Cyprus’ airspace and waters by Turkey since March, including drone and fighter aircraft incidents. EU business rules: EU co-legislators agreed a digital declaration portal for posted workers, aiming to cut paperwork for firms and improve monitoring for authorities. Public sector pay dispute: Hourly-paid government employees staged a 24-hour nationwide strike, saying pay rose just 1.5% over 17 years, with demands for retroactive increases. Banking/ratings: S&P upgraded ratings on Freedom Holding Corp. subsidiaries to “BB-” with stable outlooks, citing improved risk management. Shipping ties: Greece, Cyprus, Italy and Malta reaffirmed cooperation on maritime resilience in Rome amid regulatory and green-transition pressures. Economy snapshot: Cyprus’ economic sentiment inched up in June, helped by retail and construction, while services confidence weakened. Property momentum: Cyprus property sales rose 11.9% in the first five months of 2026, with 8,043 sales documents filed. Higher education drive: President Christodoulides said Cyprus is preparing a British Council-style body to promote universities abroad and boost international student recruitment. Tourism retail: Cyprus Duty Free marked National Day of Joy with activities at Larnaca and Paphos airports as part of a wider ARI “Chain of Joy” campaign.

Industrial Action: Hourly-paid government workers in Cyprus launched a 24-hour nationwide strike, the first since the Republic’s founding, demanding pay rises after just a 1.5% total increase over 17 years and calling for retroactive benefits from Jan 1, 2025. Energy Costs: Cyprus extended its reduced motor fuel excise duty by two months to Aug 31, cutting petrol and diesel rates by 8.33 euro cents per litre to cushion consumers and businesses amid post-Iran-war price pressure. EU Rules for Business: The EU Council agreed a negotiating stance to simplify and streamline environmental rules, including updates to sustainability transparency rules for financial products—aimed at easing administrative burdens while keeping standards high. Cyber & Finance: The Central Bank of Cyprus launched a new “Statistics Explained” section to boost public statistical literacy, translating and adapting ECB materials into Greek. Property & Credit: Cyprus’ apartment market continues to heat up, with reports pointing to rising prices and growing loan demand across households and businesses. Security & Crime: Cyprus police reported a sharp jump in cocaine seizures and warned that organised crime networks are adapting, including the emergence of more synthetic drugs. EU Infrastructure: Italy will coordinate a Mediterranean undersea cable security hub with Greece, Cyprus and Malta, backed by EU funding to improve incident response and information sharing. Education & Talent: NKUA and K Treppides & Co Group signed an MoU to link academic excellence with business experience in Cyprus and Greece. Aviation: RAF received two new Airbus H145 Jupiter helicopters for operations based in Cyprus, supporting emergency response, firefighting and medical evacuations.