Press Releases

Ladies and Gentlemen, esteemed guests,

It is with great pleasure that I join all of you for the deliberations of the 19^th Economist Annual Summit, which brings together renowned personalities from around the world.

The Summit’s theme, “Cyprus’ new Roadmap and Strategy for sustainable balance”, is very timely indeed. In these turbulent times, strategising for sustainable balance in the political and economic spheres, as well as reinforcing the resilience and competitiveness of our economies, are major challenges but also absolutely necessary.

Achieving a sustainable balance in today's complex and ever-changing world demands a holistic approach. The Government has a clear vision and a well-thought strategy to guide us towards this goal. At the same time, we know very well that in a rapidly evolving environment it is not enough to rely solely on static plans. Recent years have demonstrated the importance of fostering agility and preparedness to respond to unforeseen challenges and disruptions that jeopardise stability. As we acknowledge the interconnected nature of our world, our focus should expand beyond our national borders and extend to our wider region. By nurturing dialogue, cooperation and a collective vision for a better future, we can better adapt to change, promote peace and ensure prosperity for all.

Dear friends,

While the worst of the pandemic appears to be behind us, new challenges have emerged: the Russian invasion of Ukraine and in recent weeks the conflict in Cyprus’ immediate neighbourhood, the Middle East – both with far reaching ramifications in Europe and the world. While we work to de-escalate the crisis, prevent regionalisation and address the dire humanitarian situation in Gaza, we are also called to address the impact of these geopolitical developments on the global economy.

In my presentation today, I will start by analysing the five key priorities of our internal governance up until the end of 2028, reflecting on our journey towards a more prosperous and competitive economy for the benefit of our citizens and future generations. I will then zoom out of the building blοcks for sustainable balance internally to the external dimension of sustainable balance, from Cyprus’ perspective, and by taking a closer look at what is happening in our immediate region and how it links to Europe and the European Union.

Ladies and gentlemen,

Our country has had to work its machinery in the past few years under extraordinary conditions, addressing successive global crises that required swift responses. At the heart of effectively addressing these complexities, we worked in close cooperation and coordination with other countries and especially with our European counterparts. We will continue working collectively to address other persistent common challenges such as ageing populations, climate change and migration.

Navigating through this complex landscape requires macroeconomic stability and smart policy decisions and, most importantly, strategic orientation.

In this respect, the Government adheres to a three-pillar approach that will subsequently improve our competitive position:

Firstly, fiscal discipline through government budget surpluses to be able to support those most in need. Secondly, a stable and healthy financial sector and thirdly, continuous structural reforms.

The government’s Programme, formulated together with Cyprus' civil society, is focused on five priorities: placing citizens at the heart of policy making, ensuring a sustainable and resilient economy, a modern, fair, participatory and transparent governance, strengthening the educational and health systems of our country, and promoting the green and digital transitions.

The government plan builds on the improved performance of our economy as reflected in the recent upgrade to investment-grade by Moody’s. Based on our macroeconomic scenario, the Cypriot economy is expected to continue performing well in the medium term, despite the high level of uncertainty. The projected growth rate for 2024, without taking into account the recent developments in the Middle East, is approximately 2.9%, which is of course lower than the previous years but still significantly higher than the EU average. GDP growth of around 3% is expected for the years 2025 and 2026, indicating a positive outlook for the Cypriot economy.

Returning to the Government’s priorities, the first priority is the swift and effective resolution of long-standing issues affecting our citizens, such as affordable housing, road traffic congestion and migration. Let me say that only last week we announced a vigorous plan for affordable and attainable housing spanning over a three-year period.

Secondly, actions for building a strong and resilient economy aligned with our long-term growth Strategy, “Vision 2035”, that will further diversify the economy's growth model. What we are trying to do through the development of new high-growth sectors and the strengthening of traditionally important sectors of our economy. As we have announced, we have already embarked on the reform of the country’s tax system. At the same time, improving access to finance for Cypriot SMEs by expanding the available financing sources is a key priority to facilitate our reform effort, and we intend to address it decisively through the establishing of a Business Development Agency.

Thirdly, the Government is committed to creating a modern state, where long-standing issues are resolved effectively. To ensure our policies have a greater impact and are implemented timely, we have established, following good practices in other EU member states, the Secretariat for coordinating and supporting the Government Programme under the Deputy Minister to the President. Another meaningful horizontal reform worth mentioning is the modernisation of the public sector and the establishment, for the first time, of the Advisory Council to appoint members to the Boards of Directors of state-owned enterprises.

Speed in the delivery of justice, mediation as an institution that accelerates dispute resolution, and transparency in political, social, and business life are fundamental pillars for the development of entrepreneurship and the establishment of Cyprus as an International Business Centre. We have initiated crucial changes in pursuit of this goal, including the establishment of the Anti-Corruption Authority in 2022 from the previous administration and the ongoing Judicial Reform. Society calls for tackling corruption and promoting meritocracy and we will respond to that call.

The fourth priority concerns education and health. I believe that the current educational system needs to be reformed to equip both current and future students with the skills needed in the labour market of the future.

I consider it equally important to safeguard the health system. The operation of the National Health System, GeSY, is undoubtedly one of the most significant social reforms of Cyprus in recent years. We will safeguard this valuable achievement and we will fine tune any challenges that have been identified in the first few years of its implementation. By leveraging the expertise of the medical community and healthcare professionals, we are working to meet citizens' expectations for high-quality healthcare services while strengthening hospitals, ensuring equal access to treatments, and promoting preventive measures. Our goal is seamless access to quality healthcare services for all, regardless of their location, and the adoption of innovative treatments and medications.

The fifth priority of the Government is the overarching aim of accelerating green and digital transitions. The main objective is to meet EU’s ambitious green targets through the implementation of the necessary measures, including, among others, a sizeable amount of grant schemes and regulatory adjustments to expedite the adoption of renewable energy solutions, actions to promote cyclical economy, as well as the implementation of the green taxation reform. The digital transition is an equally important catalyst in reforming our economy and society. Our goal is to create a fully digitalised modern state that offers quality services to citizens and businesses. It will also facilitate the development of new knowledge-intensive sectors, enabling the diversification of our economy.

Furthermore, we are leveraging the promising prospects of our ICT ecosystem and the advantages of our location for establishing an international business centre, while actively promoting and enhancing the Strategy for Attracting Business and Talent, which has already produced significant results.

Ladies and gentlemen,

Implementing policies that aim to improve the economy's growth prospects and competitiveness is essential. However, these policies need to be complemented by social policies that aim to maintain and improve social cohesion. Economic growth and social justice can go hand in hand and should work in a complementary manner. This is why I frequently reiterate the anthropocentric philosophy of my government’s strategy.

We are committed to ensuring that the citizens remain at the core of our policies and that no one is left behind. In practical terms, this translates into supporting high levels of employment and skills, modernising the labour market, training and social protection systems, eradicating poverty, addressing social exclusion and improving public health. This Government plans to consistently carry out ambitious actions under these pillars and link general policy decision-making to indicators of social progress.

Ladies and gentlemen,

The path to sustainable balance has both an inward and an outward dimension. Sustainable balance internally is inextricably linked to sustainable balance in Cyprus’s immediate region, the Middle East, as well as our political family, the European Union.

On the regional front, we are witnessing an unfolding crisis that can have extensive ramifications for all countries of the region, for Europe and indeed the world. From the first moment, Cyprus unequivocally condemned the heinous terrorist attack against civilians. Terrorism is never justified and can never be contextualised. At the same time, protection of all civilians, and adhering to international law and international humanitarian law, are of critical importance. We focus our efforts on preventing regionalisation of the crisis, as well as addressing the dire humanitarian situation in Gaza. In this context, Cyprus, as a country of the region and the closest EU member state that has excellent relations with its neighbours, has presented an initiative for the creation of a maritime corridor for sustained, secure high-volume flow of humanitarian assistance to Gaza in the immediate, medium and long term. We are working closely with countries of the region – Israel, Egypt, Jordan, Palestine - and with the US, France, the EU and the UN in operationalising this initiative.

Moreover, Cyprus is fully undertaking its role with regards to the evacuation of European, American and other citizens from the area of conflict to safety.

At the same time, we have been stressing the importance for the EU to engage meaningfully with the region, with the countries of the region, because the MENA region is the EU’s neighbourhood as well. The migration crisis – that is impacting Cyprus greatly and which the government has been working to address – has proven that unless the root causes of crises are addressed, many of which stem from this region, no sustainable solution can be achieved.

At a time when I hope the world is waking up to the fact that there are no frozen conflicts and that what is required to prevent eruption of conflicts is viable and lasting peace, we are also working tirelessly to break the impasse in the negotiations for a comprehensive settlement of the Cyprus question in line with UNSCRs, EU law values and principles. This is my highest priority, and one that runs like thread through the Government programme.

There is no substitute for dialogue, for peace. I strongly believe that the current status quo in Cyprus is not viable and it is not static. And that, through reunification, Cyprus can be on an accelerated path for growth and prosperity.

The Cyprus question, dear friends, is a European one. And it calls for European answers. I believe adamantly that the EU, a peace project, can act as a catalyst for peace for one of its member states, through assuming a more active role at all stages of the efforts to reunify Cyprus. And I believe that through an effective, mutually beneficial process, that includes the Cyprus question and EU-Turkey relations, we can make a breakthrough.

In this regard, and ahead of the anticipated discussion on EU-Turkey relations in December, progress is expected on the Cyprus question; that starts with the appointment of a UN Envoy. On our part, we have given the green light to the UN Secretary General and very much hope that the Turkish side will respond to the UN Secretary General’s call.

Ladies and gentlemen,

The complexity of the challenges we face at EU level and globally during the past few years make it impossible to treat them as temporary or unforeseen. It is essential to develop at a global, European and country level the necessary resilience and agility to tackle the current and anticipated challenges. The European Union has demonstrated enhanced agility, providing us with more appropriate enablers to harness the opportunities ahead of us.

In closing, as we embark on the journey towards Cyprus' new roadmap and strategy for sustainable balance, let us be mindful of the timeless wisdom of Benjamin Franklin, who once said, "Failing to prepare, you are preparing to fail."

The path to sustainable balance demands careful planning, strategic foresight, and a collective commitment to continuous reforms.

On our part, I firmly believe that our efforts on maintaining sound public finances, complemented of course with ambitious reform initiatives, both necessitated and supported by the new era’s realities, provide the appropriate pre-conditions for a brighter, more sustainable, peaceful future for Cyprus, where prosperity and the well-being of citizens become the destination of our collective journey.

Thank you very much.

(AP/EP)