Dear fellow citizens,
2026 is shaping up to be a year of high expectations but also significant challenges for Cyprus and the business community. On behalf of the Employers and Industrialists Federation (OEB), I extend warm wishes to every citizen, employee and entrepreneur for health, creativity and prosperity.
The year that is coming to an end was marked, like the previous ones, by international geopolitical instability, energy uncertainty and increased regulatory, regulatory and supervisory requirements. Despite the volatile and challenging environment, the Cypriot economy has shown enviable resilience. Our businesses, with maturity and adaptability and in cooperation with the public sector, have kept the country in high macroeconomic performance.
The numbers confirm the truth: Cyprus maintains growth rates above the European average, with estimates for 2025 reaching 3.4% and with similarly positive prospects for 2026. The country’s return to investment grade “A” by international rating agencies, the spectacular fall in public debt below 60% of GDP and the stabilization of inflation at levels below one percentage point, together with the modernization of the country’s tax system that was completed in time before the end of this year, send a strong message of stability, credibility, seriousness and optimism.
At the same time, the reduction of unemployment to below 4.5% and the skyrocketing of employment of the economically active population beyond 80%, with a significant increase in real wages, prove that economic growth is in line with the absolutely necessary social cohesion.
Ladies and gentlemen,
2026 is not a year like any other. As of January 1st, our country takes over the Presidency of the Council of the European Union, which puts us at the center of European developments.
For OEB, this is a historic opportunity. Competitiveness has finally become a strategic goal of the highest priority for the EU and Cyprus can leave a deep imprint by promoting the “de-bureaucratization” (omnibus and simplification process).
It is with deep satisfaction that we see the Cyprus Presidency moving forward with the goal of “An autonomous Union, open to the world” and one of its highest priorities being “Autonomy through Competitiveness”. The rapid recovery of the competitiveness of the European economy vis-à-vis the US and China is a literal existential issue for European businesses.
OEB, as the most representative and truly independent Employers’ Organization in the country, is already dynamically representing Cypriot entrepreneurship in this process. Starting with the hosting in Nicosia last November of the Council of Presidents of the 42 Employers’ Member Organizations of BusinessEurope from 36 European Countries, we set an example of a Presidency that will produce substantial work.
I will personally have the honour of participating in the Bureau of BusinessEurope, Europe’s largest business organization, as its Vice President until the end of 2026, ensuring that the Cypriot business community has a voice where European decisions are shaped.
However, in order to maintain the rapid pace of improvement in the standard of living of citizens and to strengthen national competitiveness, we must put an end to chronic pathologies at home. Primary fiscal surpluses are rightly used wisely to reduce public debt, but part of them must be channeled into investments on the basis of a national masterplan that will definitively resolve critical issues over the years:
i) The energy sector by ensuring energy sufficiency and security at affordable electricity costs, combining the green transition with economic sustainability,
ii) the water with the definitive exemption of the country from dependence on weather conditions and rainfall,
iii) housing, especially for young people,
iv) the lack of specialized personnel (in tourism, industry, construction, health, etc.).
Along with the chronic issues, new challenges emerge that in 2026 must be handled in the form of urgency. The most basic of these is the management of the rapid technological transition. The implementation of the European Artificial Intelligence Regulation (AI Act) and the stricter NIS2 Directive on cybersecurity, set new rules with which we must adapt quickly in order to gain a comparative advantage.
The progress and well-being of employees is inextricably linked to the positive course of businesses. Wages and benefits can only be sustainably improved through robust and competitive entrepreneurship, increased productivity and improved profitability. Unsubstantiated and unrelated to productivity increases that are artificially imposed from top to bottom, create distortions and in the medium term affect first, but not exclusively, those they theoretically seek to protect.
When we discuss the revision of the national minimum wage, we must move on the basis of the performance of the real economy, ensuring that the competitiveness of the country’s economy is maintained.
In relation to pension reform, we must maintain tripartite funding and share the burden fairly not only between the three contributors but also between generations, while at the same time eliminating the pension inequality between comparable public and private sector workers.
Ladies and gentlemen,
OEB will continue to work consistently and professionally to create an environment that creates real prospects for growth and prosperity for all.
I wish you a Merry Christmas and may 2026 be happy and creative for everyone.
