Press Releases

“Vision 2035 – An update on the long-term Vision for Cyprus as a Model Nation”

Dear Chairman and Members of the Executive Committee of the Cyprus International Business Association (CIBA),

Dear Ministers,

Ladies and gentlemen,

It is with great pleasure that I join you today at the CIBA International Business Summit on the occasion of its 30-year anniversary.

Allow me first to extend my warm congratulations to CIBA for their long-standing contribution in safeguarding the interests of international businesses in Cyprus and for advocating for a more business-friendly environment. CIBA, through its consistency and constructive cooperation, is a valuable partner to the Government in its efforts to enhance competitiveness, to attract foreign direct investment and the setting up of a supportive entrepreneurial ecosystem.

Dear ladies and gentlemen,

"Vision 2035" strategy sets a long-term ambitious target: for Cyprus to become one of the best places in the world to live, work and do business in. This strategy was developed in 2022 and our administration fully endorsed it when it took office in March 2023. We remain committed to this strategy since it fundamentally ensures the long-term sustainability of the economy. At its core, the strategy aligns with our goals for economic resilience and growth.

Our vision is for an economically and socially prosperous country to live in, with modern infrastructure that utilises green energy and the advantages and opportunities provided by technology and digitisation. We aspire to live in a country that is safe, with skilled and qualified workforce that will claim high quality jobs based on a new production model – diversified and enriched; a competitive economy with enhanced exports of both products and services and an attractive destination for foreign high value-added investments.

We are well aware this is an ambitious vision. We live in the era of globalisation with all the opportunities and challenges that this entails. At the same time, we are experiencing the effects of the geopolitical tensions that the world is currently undergoing. In order to navigate this complex landscape, we need a clear political plan. We also need to remain committed to fiscal responsibility, financial stability, and continuous structural reforms.

I will first like to refer briefly to the performance of the economy. Amidst adverse conditions for the global economy, Cyprus is one of the top performers in the European Union in terms of economic growth. More specifically, our economy experienced a growth rate of 3.5% in the first quarter of 2024. Overall, for the years 2024 and 2025, growth is expected to further increase compared to 2023, unemployment is projected to decrease to the lowest level since 2009, while inflation will continue to slow down. At the same time, a significant reduction in public debt is being achieved and we are aiming to reduce it below 60% of GDP by 2026. The positive performance and outlook are also confirmed by the recent upgrades by two major international rating agencies in the last two weeks.

Another development that constitutes a testament to the strong performance of the economy was the issuance of a seven-year bond last week, worth €1 billion in international markets with an interest rate of 3.25% and a yield of 3.31%. The expressed interest from international and domestic investors translated very quickly into an order book of €9.6 billion and allowed the rapid completion of the process with positive results for the Republic. It proves the ability of the Republic to finance its needs at a reasonable cost, ensuring our country's long-term economic prospects.

Both the upgrades by the rating agencies and the successful issuance of the government bond demonstrate the trust of international investors in our economic policies and in the resilience and positive prospects of the Cypriot economy for the years to come.

Ladies and gentlemen,

Vision2035 is defined by three pillars, 13 strategic goals and 242 initiatives to transform Cyprus into a thriving and sustainable country. I would like to highlight the progress on three key elements of the strategy, which I believe have a significant impact on our country’s transformation: the creation of a sustainable and resilient economy, the green and digital transitions and the internationalisation of the economy.

As regards the conditions for a sustainable and resilient economy, I believe that the reform of the tax system, one of the first initiatives of our government, will play a crucial role. The main pillars of this reform are the increase of our country's competitiveness, the reduction of administrative burden for taxpayers and businesses, and, at the same time, the provision of a fairer distribution of the tax burden. The tax reform is well underway and the first recommendations will be presented in autumn this year. At the same time, we strive to align our policy with the goals of the European Green Deal, within the framework of the promoted green tax reform, aiming to address the huge challenges of climate change, the consequences of which we experience daily.

Our goal is for the green tax reform to contribute to achieving our country's climate goals while allowing it to address some distortions in the economy, i.e. changing habits in the polluting sectors of transport, energy and water, and promotion of circular economy. Additionally, it is expected to further boost innovation and "green" investments in the energy sector, environmental protection, and waste reduction.

This brings me to the second element of the strategy I wish to underline, which is the green transition. It is a fact that the high energy prices in Cyprus hamper the competitiveness of businesses and erodes the purchasing power of households. The way to address this challenge is through the increase in energy production from renewable sources and the enhancement of energy efficiency, both of which are included in our strategic objectives for 2024. In this context, the Council of Ministers approved in January the ambitious Grant Scheme for "Encouraging the Use of Renewable Energy Sources and Energy Saving in Homes," including the "Photovoltaics for All" category. At the same time, additional schemes were launched for Energy Upgrade and Enhancement of the Competitiveness of Large Enterprises, the promotion of circular economy and the Scheme for energy upgrade for enterprises. Furthermore, only last week, the Minister of Interior announced the new spatial policy for renewable energy sources which together with the one stop shop for energy projects will speed up, facilitate, and simplify the licensing of RES projects through an integrated digital platform. Regarding the conventional fuels sector, we aim to complete the necessary infrastructure to lift Cyprus' energy isolation and bring natural gas for power generation and electrical interconnection with neighbouring countries.

As regards digital transition, a fundamental development was the launch of the electronic application for strategic development projects through the "Ippodamos" information system. This measure facilitates rapid licensing. The adoption of the electronic application aligns with the government's broader efforts to modernise the state and reduce bureaucracy, thereby creating an investor-friendly environment. Another upcoming flagship initiative is the digital citizen; an application through which official documents, such as driving licenses and biometric IDs, will be digitised and securely stored, gradually encompassing all government-issued documents. The digital citizen initiative is expected to be operational in autumn 2024, serving as a new tool for citizen-state interaction.

Dear friends,

As an Association which deals with international businesses, I am sure you appreciate the importance of enhancing the internationalisation of the economy; a pivotal element for any free-market democracy allowing for access to larger markets through enhanced trade, access to diverse sources of capital and technology, and the achievement of economies of scale. Importantly, economic extroversion promotes knowledge transfer and skills development through exposure to international best practices, enhancing the long-term growth potential of the economy.

Another major goal we have set since the beginning of our administration is to safeguard the name of Cyprus as a reliable business centre. In this direction, we have been working with supervisory bodies and the technical support of international experts from the UK and the US to strengthen our framework, including the establishment of a Single Supervisory Mechanism for administrative service providers. At the same time, we are moving forward with the implementation of a concrete campaign for the rebranding of Cyprus. Once the campaign is launched later this year, we will need the cooperation of your Association and your members individually in the activities that will take place.

Furthermore, the recent agreement with the USA for the establishment of a strategic dialogue between our two countries is a clear political message that paves the way for enhanced cooperation with one of the world’s largest economies with all the benefits this can bring, especially in the areas of security and defence, energy, research, trade, culture and investment.

Dear all,

In conclusion, allow me to express the appreciation of the Government to the invaluable contribution of international businesses to Cyprus. Your presence and investment play a pivotal role in bolstering our economy, fostering job creation, and enhancing our competitiveness on the global stage. Not only you bring with your companies vital capital and expertise, but also contribute to the transfer of knowledge and technology, driving innovation across various sectors. Your commitment to our country strengthens our economic resilience and diversifies our economic base, crucially supporting our efforts towards sustainable growth and development. Moreover, the constructive engagement of CIBA enhances our country’s attractiveness as a business-friendly environment and a strategic gateway to regional and international markets.

From the Government’s side, we are committed to fostering a conducive environment for international businesses, ensuring mutual prosperity and long-term partnerships that benefit both Cyprus and our global collaborators.

Thank you for your attention.

(RM/GS/AP)