European Commission Seeks Refund From Cyprus Over Vasiliko LNG Project Funding

In a significant financial and political development, the European Commission (EC) has demanded a refund of €68.6 million from Cyprus, a sum previously allocated for the Vasiliko liquefied natural gas (LNG) terminal project. The EC’s claim follows concerns over irregularities during the tender evaluation process and subsequent contract awarding to a consortium.

Irregularities and Contract Issues

The EC’s request centers around two primary violations: first, the criteria used in awarding the tender to the consortium comprising China Petroleum Pipeline Engineering Co. Ltd., Metron Energy Applications S.A., Hudong-Zhonghua Shipbuilding (Group) Co. Limited, and Wilhelmsen Ship Management Limited in December 2019. Second, issues arose with the signing of a bilateral agreement following an additional €25 million funding approval in June 2022.

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Government Response and Investigation

The Ministry of Energy, Commerce and Industry has acknowledged the EC’s concerns and is preparing to respond within the stipulated 30-day period. The ministry stressed its commitment to defending Cyprus’s interests and is cooperating fully with European authorities to investigate the matter. The government has pledged “zero tolerance” for any procedural lapses and is focused on completing the Vasiliko project.

Broader Implications

The Vasiliko LNG terminal, part of the Cyprus Gas 2 EU project, is a Project of Common Interest and has received significant European funding totalling €101 million. The project’s completion is crucial for Cyprus’s energy infrastructure and its alignment with EU energy goals.

This development underscores the importance of adherence to EU regulations and transparency in large-scale public projects. It also highlights the financial and operational risks associated with non-compliance, which can lead to substantial financial repercussions and potential delays in critical infrastructure projects.

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Cyprus Hits Historic Tourism Peak As Overtourism Risks Mount

by THEFUTURE.TEAM

February 13, 2026

Record-Breaking Performance In Tourism

Cyprus’ tourism sector achieved unprecedented success in 2025 with record-breaking arrivals and revenues. According to Eurobank analyst Konstantinos Vrachimis, the island’s performance was underpinned by solid real income growth and enhanced market diversification.

Robust Growth In Arrivals And Revenues

Total tourist arrivals reached 4.5 million in 2025, rising 12.2% from 4 million in 2024, with momentum sustained through the final quarter. Tourism receipts for the January–November period climbed to €3.6 billion, marking a 15.3% year-on-year increase that exceeded inflation. The improvement was not driven by volume alone. Average expenditure per visitor increased by 4.6%, while daily spending rose by 9.2%, indicating stronger purchasing power and higher-value tourism activity.

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Economic Impact And Diversification Of Source Markets

The stronger performance translated into tangible gains for the broader services economy, lifting real tourism-related income and overall sector turnover. Demand patterns are also shifting. While the United Kingdom remains Cyprus’ largest source market, its relative share has moderated as arrivals from Israel, Germany, Italy, the Czech Republic, the Netherlands, Austria, and Poland have expanded. This gradual diversification reduces dependency on a single market and strengthens resilience against external shocks.

Enhanced Air Connectivity And Seasonal Dynamics

Air connectivity has improved markedly in 2025, with flight volumes expanding substantially compared to 2019. This expansion is driven by increased airline capacity, enhanced route coverage, and more frequent flights, supporting demand during shoulder seasons and reducing overreliance on peak-month flows. Seasonal patterns remain prominent, with arrivals building through the spring and peaking in summer, thereby bolstering employment, fiscal receipts, and corporate earnings across hospitality, transport, and retail sectors.

Structural Risks And Future Considerations

Despite strong headline figures, structural challenges remain. The European Commission’s EU Tourism Dashboard highlights tourism intensity, seasonality, and market concentration as key risk indicators. Cyprus records a high ratio of overnight stays relative to its resident population, signalling potential overtourism pressures. Continued reliance on a limited group of origin markets also exposes the sector to geopolitical uncertainty and sudden demand swings. Seasonal peaks place additional strain on infrastructure, housing availability, labour supply, and natural resources, particularly water.

Strategic Investment And Market Resilience

Vrachimis concludes that sustained growth will depend on targeted investment, product upgrading, and continued market diversification. Strengthening year-round offerings, improving infrastructure capacity, and promoting higher-value experiences can help balance demand while preserving long-term competitiveness. These measures are essential not only to manage overtourism risks but also to ensure tourism remains a stable pillar of Cyprus’ economic development.

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