Trade unions expressed satisfaction following a meeting at the Presidential Palace today with President Christodoulides concerning the new Cost of Living Allowance (COLA/ATA) agreement, which is scheduled to be signed at 14:00.
The final framework provides for a gradual return to 100% COLA adjustment over three phases: 80% on 1 January 2026, 90% on 1 July 2026, and 100% on 1 July 2027. Following the phase-in, the adjustment will be made every July at 100%.
The calculation of the COLA will be based on the average rate of growth from the previous year, which must be positive.
Agreement details and inflation cap
The framework also includes a 4% inflation cap; if inflation exceeds 4%, COLA will be paid only up to the 4% limit, according to Stratis Matthaiou, General Secretary of PASYDY (Public Servants Union).
The agreement further provides for the convening of an expanded session of the Labour Advisory Body to provide recommendations during periods of economic crisis.
The National Minimum Wage will be linked to COLA by incorporating an amount corresponding to the cost of living allowance from the preceding two years, with a re-evaluation of the issue scheduled for 2028.
The meeting was attended by representatives from the unions SEK, PEO, DEOK, and PASYDY, along with Labour Minister Yiannis Panayiotou, Finance Minister Makis Keravnos, Deputy Minister to the President Irini Piki, and Government Spokesperson Konstantinos Letymbiotis.
On the employer side, Michalis Antoniou, Director General of OEB (Employers and Industrialists Federation), confirmed that although the final texts were not yet received, “the substance does not change.” He confirmed the agreed-upon formula for the minimum wage, which provides for the COLA adjustment every two years, and noted that the provision concerning incentives for employers to extend the institution has been redrafted.
Antoniou estimated that three separate documents may be signed this afternoon: one for the COLA agreement, one for the minimum wage, and one for employer incentives. All social partners are expected to make statements after the 14:00 signing ceremony.
