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EU Services Production Grows As Information And Communication Lead

by THEFUTURE.TEAM

November 10, 2026

Services production continued to expand across the European Union in August 2026, with information and communication recording the strongest annual growth. However, performance varied significantly between industries and member states, while Cyprus reported a mixed picture, with business services expanding and hospitality-related activities declining.

Information And Communication Leads Sector Growth

Compared with August 2025, services production increased by 5.9% in the euro area and 5.8% across the EU in information and communication. Transportation and storage also recorded growth, rising by 2.1% and 1.9%, respectively.

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Real estate activities increased by 1.6% in the euro area and 1.1% in the EU. Professional, scientific and technical activities grew by 1% in both areas, while administrative and support services advanced by 1.1% and 1.3%.

Accommodation and food services was the only major sector to record an annual decline, falling by 0.1% in both the euro area and the EU.

The monthly figures were more mixed. Information and communication remained the strongest performer, increasing by 1.2% in the euro area and 1% across the EU. Real estate activities rose by 0.4% and 0.9%, respectively, while transportation and storage edged up 0.1% in the euro area but declined by 0.2% in the EU.

Administrative and support services recorded modest gains of 0.2% in the euro area and 0.1% in the EU. Accommodation and food services fell by 0.3% and 0.4%, while professional, scientific and technical activities declined by 0.8% and 0.9%, respectively.

Slovakia And Greece Record Strongest Annual Growth

Romania recorded the largest monthly increase in services production, at 5.2%, followed by Malta at 1.8% and Portugal at 1.7%. Luxembourg experienced the steepest decline, with output falling by 5.1%, followed by Bulgaria at 2.3% and Denmark at 1.9%.

On an annual basis, Slovakia led with growth of 10%, followed by Greece at 9.3% and Malta at 7.5%. Hungary recorded the weakest performance, with services production declining by 5.6%. Denmark fell by 5.3%, while Italy recorded a smaller decrease of 0.3%.

Cyprus Sees Growth In Business Services But Weakness In Hospitality

Cyprus’ latest figures show a similar divide between expanding business services and weaker hospitality-related activities. According to the Statistical Service of Cyprus (Cystat), professional, scientific and technical activities recorded the strongest annual growth among the covered sectors in the second quarter of 2026, increasing by 3.4%.

Transportation and storage and information and communication both grew by 2.1%, while real estate activities rose by 1.6%. In contrast, accommodation and food services declined by 3.1% year on year, and administrative and support services fell by 2.2%.

First-half results were more favourable for several sectors. Between January and June, professional, scientific and technical activities grew by 3.5%, transportation and storage by 2.8%, real estate by 2.1% and information and communication by 1.3%.

Nevertheless, administrative and support services contracted by 1% over the six-month period, while accommodation and food services declined by 0.7%.

How Cyprus’ Figures Differ From Eurostat’s Data

The Eurostat and Cystat figures measure different aspects of economic activity and are not directly comparable. Eurostat’s services production index tracks changes in the volume of output, whereas Cystat’s Turnover Value Index for Services and Transport measures the value of sales at current prices.

The reporting periods also differ: Eurostat’s figures cover August, while the cited Cypriot data relate to the second quarter and first half of 2026.

Cystat transmits services production data to Eurostat but does not yet publish a separate national production index. Turnover figures therefore remain the main publicly available national indicator for the sector.

Taken together, the data point to continued growth in several of Cyprus’ business-oriented services, alongside persistent pressure on accommodation, food and administrative support activities.

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Cyprus Could Get Until 2036 To Meet New EU Tobacco Tax Rules

by THEFUTURE.TEAM

November 10, 2026

Cyprus could receive until 2036 to comply with higher European Union minimum cigarette taxes under a proposed compromise supported by Nicosia. However, the plan failed to secure unanimous approval on November 9 after Malta opposed the reforms, despite support from the other 26 member states.

EU finance ministers ended negotiations in Brussels without an agreement. For Cyprus, the proposed transition period would allow tobacco duties to increase gradually rather than meet the new EU thresholds by 2032.

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Cyprus Backs A Longer Transition Period

Finance Minister Makis Keravnos supported the latest compromise presented by the Irish presidency, describing it as balanced and flexible enough to reflect national circumstances.

According to the Cyprus Finance Ministry, the proposal builds on negotiations during Cyprus’ presidency of the Council earlier this year.

Under the plan, the EU minimum excise duty on cigarettes would rise from €90 per 1,000 cigarettes currently to €140 in July 2028, €170 in 2030 and €200 in 2032. By 2032, the duty would generally also have to represent at least 60% of the weighted average retail price, subject to exemptions.

These are minimum tax requirements, not automatic retail price increases. The impact on consumers would depend on national tax decisions and how much of the additional cost tobacco companies pass on.

Ten countries, including Cyprus, Greece, Italy, Bulgaria, Spain, Croatia, Luxembourg, Portugal, Romania and Slovenia, could receive an extension until January 1, 2036. The additional time would apply where meeting the proposed thresholds requires average annual excise increases of more than 2.35% compared with 2025 levels. The transition would also cover fine-cut tobacco.

The extension remains subject to negotiations. Until an agreement is reached, there will be no immediate change to cigarette taxation in Cyprus.

New EU Taxes For Alternative Nicotine Products

The reform would also introduce common minimum duties for e-cigarettes, heated tobacco and nicotine pouches.

Under the compromise, e-cigarette liquids, including nicotine-free products, would initially face minimum taxation of either 20% of the retail price or €0.20 per millilitre. Nicotine pouches would be taxed from 2028 at 10% of the retail price or €30 per kilogram.

The Council negotiating document sets out further increases for nicotine pouches: 25% or €40 per kilogram in 2030, rising to 50% or €50 per kilogram in 2032.

The proposed rates initially faced objections from Finland, which considered them too low, and Estonia, which opposed provisions allowing future adjustments without unanimous approval. Both countries eventually backed the revised compromise after the Irish presidency offered to revisit pouch taxation and the inflation adjustment mechanism.

Malta Blocks Agreement

Malta remains the only member state opposing the proposal. Finance Minister Clyde Caruana argues that the minimum rates are too high compared with current Maltese duties and could impose a disproportionate economic cost.

He has also questioned the extent to which EU legislation should restrict national tax policy. Although Malta supports the reform’s broader objectives, it considers the current terms unacceptable.

EU tax legislation requires unanimous approval, meaning one member state can block an agreement. Irish Finance Minister Simon Harris, who chaired Monday’s meeting, said negotiations would continue in December, while welcoming the support secured from 26 countries.

Changes To Cross-Border Tobacco Purchases

The compromise also proposes lowering the indicative quantity of cigarettes for personal consumption carried across EU borders from 800 to 200.

This would not automatically prohibit travellers from carrying more than 200 cigarettes. Customs authorities would continue assessing whether tobacco was intended for personal use or resale, taking individual circumstances into account.

Public Health And Revenue Objectives

The reform aims to update EU tobacco taxation rules that have not undergone a major revision since 2010, despite changes in smoking habits and the emergence of alternative nicotine products.

When the European Commission presented its original proposal in July 2025, it estimated that the changes could generate an additional €15 billion in annual EU tax revenue and reduce healthcare costs by around €6 billion.

Tobacco causes almost 700,000 deaths annually in the EU, where smoking prevalence remains around 24%. The Commission aims to reduce tobacco use to below 5% of the population by 2040.

For Cyprus, the outcome of the negotiations will determine whether higher EU minimum tobacco duties can be introduced over an extended transition period ending in 2036.