Cyprus is set to continue electricity subsidies beyond the current month’s deadline, either through horizontal or targeted measures, following discussions between government coalition parties and Finance Minister Makis Keravnos.
The scheme, which has provided significant relief to households, was discussed during a high-level meeting attended by leaders and economic teams from DIKO, EDEK, and DEPA parties, alongside finance ministry technocrats.
Sources close to the matter indicate that whilst briefing party officials on positive economic indicators and reduced public debt, the minister expressed concerns about the current subsidy format.
The ministry appears to favour a more targeted approach that would benefit fewer recipients.
When questioned about the subsidy’s future, Keravnos simply stated that “this is an issue that greatly concerns us”.
The ministry is considering a proposal to include low-income pensioners in the EAC’s special tariff 08, currently reserved for vulnerable consumers.
Officials are also exploring the possibility of the state assuming the cost of tariff 08, rather than passing it on to other consumers as is currently practised.
Additionally, the finance ministry informed coalition parties that it is examining scenarios to eliminate VAT on carbon emission rights purchases, which currently affects consumer billing.
The government also revealed plans to address housing affordability.
The finance ministry, in collaboration with the Central Bank, is exploring the establishment of a Unified Housing Agency and considering grants and tax deductions to reduce rental costs.
Plans under consideration include offering property owners grants between €15,000 and €20,000 to renovate vacant buildings, provided they offer rentals at approximately 30 per cent below market rates.
Income from these properties would be tax-deductible.
Other measures being examined include:
- Taxation on inactive urban plots
- Earlier disbursement of government housing grants for refugees
- Expansion of income criteria for child benefits, disability allowances, and student grants
- Modifications to disability benefit criteria independent of guaranteed minimum income procedures
The new government package addressing cost-of-living concerns is expected to be announced in November, with measures targeted at vulnerable groups and middle-class segments of the population.
