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Cypriot Bonds Held By The Eurosystem Decline To €6.38 Billion

by THEFUTURE.TEAM

The European Central Bank’s ongoing efforts to deleverage its balance sheet have led to a significant reduction in the value of Cypriot sovereign bonds held by the Eurosystem. As of mid-August 2024, these bonds, which are part of the Public Sector Purchases Programme (PSPP) and the Pandemic Emergency Purchases Programme (PEPP), have declined to €6.38 billion, representing 28% of Cyprus’ public debt. This reduction aligns with the ECB’s broader strategy to curb inflation by reducing market liquidity, including ending reinvestments in its Asset Purchase Programme (APP).

The Eurosystem’s bond holdings in Cyprus are split between two key programmes: the Public Sector Purchases Programme (PSPP) and the Pandemic Emergency Purchases Programme (PEPP). The PSPP portfolio has seen a reduction to €3.99 billion, driven by the redemption of maturing bonds worth €304 million. This portfolio’s weighted average maturity now stands at 7.62 years. Meanwhile, the value of Cypriot bonds held under the PEPP has also declined to €2.39 billion, with cumulative net purchases dropping by €76 million in July alone.

The ECB’s approach is part of its restrictive monetary policy cycle, aimed at curbing inflation across the Eurozone. In a decisive move in August 2023, the ECB announced the discontinuation of reinvestments under the wider Asset Purchase Programme (APP), of which the PSPP is a part, from July 2023 onwards. This decision is a clear signal of the ECB’s intent to reduce liquidity in the market, a strategy that complements its broader efforts to tighten monetary conditions and manage inflationary pressures.

The implications of this policy for Cyprus are significant. With Cypriot bonds held by the Eurosystem now accounting for 28% of the country’s public debt, the reduction in ECB support could exert upward pressure on Cyprus’s borrowing costs. This scenario may necessitate more robust fiscal policies from the Cypriot government to maintain financial stability.

Looking ahead, the ECB has outlined its plans to continue reducing the PEPP portfolio by €7.5 billion per month on average during the second half of 2024, with a complete discontinuation of reinvestments by the end of the year. This signals a continued tightening of monetary policy that will likely impact not just Cyprus but all Eurozone economies.

EU Farm Output Prices Decline For The First Time In Nine Months

by THEFUTURE.TEAM

EU Market Adjustments Signal New Price Trends

Agricultural output prices across the European Union declined in the fourth quarter of 2025, marking a shift after several quarters of increases. Data from Eurostat shows that farm gate prices fell by 1.9% compared with the same period in 2024.

Crisis of Declining Prices In Select Markets

Cyprus recorded one of the more notable decreases in agricultural input costs among EU member states, with prices falling by 2.6% compared with Q4 2024. The reduction eased cost pressures for the local agricultural sector following periods of higher prices earlier in 2025. Across the EU, prices for goods and services consumed in agriculture remained relatively stable. Non-investment inputs such as energy, fertilisers and feedingstuffs showed limited overall changes during the quarter.

Country-Specific Divergence In Price Movements

Eurostat data highlights considerable variation across member states. Fifteen EU countries recorded declines in agricultural output prices. Belgium registered the largest decrease at 12.9%, followed by Lithuania (8.2%) and Germany (6.0%). At the same time, twelve countries reported increases in output prices. Ireland recorded the strongest rise at 6.8%, followed by Slovenia (5.6%) and Malta (4.2%).

Stability In Agricultural Inputs Amid Commodity Shifts

Agricultural input prices also showed mixed developments. Eleven member states recorded declines, including Cyprus (2.6%), Belgium (2.1%) and Sweden (2.0%). Other countries experienced moderate increases, including Lithuania (4.2%), Ireland (3.3%) and Romania (2.5%). Among major agricultural commodities, milk prices declined by 4.1% while cereal prices fell by 8.9% across the EU. In contrast, fertilisers and soil improvers increased by 7.9%, reflecting continued volatility in input markets.

Outlook For EU Agriculture

The latest Eurostat data points to uneven price developments across the EU agricultural sector. While input prices remained broadly stable in many markets, movements in output prices varied significantly between member states. These trends highlight the need for farmers and policymakers to adapt to shifting commodity prices and changing cost structures across the European agricultural market.

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