Cyprus Approves Retroactive Seafarer Tax Exemption From 2010

Cyprus has approved legislation that exempts nonresident seafarers from contributions to the social cohesion fund, with retroactive effect from January 1, 2010. Lawmakers passed the amendment with 23 votes in favor and 19 against.

Legislative Reform Aimed At Leveling The Maritime Playing Field

The amendment applies to foreign seafarers working for Cypriot companies, including those in inland navigation who contribute to social insurance. Under previous rules, employers paid a 2% levy on wages to the social cohesion fund. The fund supports social benefits and vulnerable groups. The exemption restores a provision that existed under earlier merchant shipping legislation.

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Policy Rationale And Economic Implications

Lawmakers supporting the bill said the change is not expected to reduce state revenue. They said the measure could encourage shipping companies to retain operations and headquarters in Cyprus. Supporters added that increased business activity could offset losses through higher contributions to the social insurance system.

Political Debate and Controversial Perspectives

Fotini Tsiridou, MP of Disy, and Efthimios Diplaros, MP of Disy, introduced the bill alongside Panikos Leonidou, MP of Diko, and Alekos Tryfonides, MP of Dipa. Giorgos Koukoumas, MP of Akel, said the exemption could reduce fund revenue by €600,000 to €800,000 per year. He added that the measure may shift public resources toward private companies. Concerns were also raised about potential constitutional issues and compliance with EU state aid rules. Officials from the Deputy Ministry of Shipping and the state aid control authority expressed reservations.

Balancing Competitiveness With Social Accountability

Andreas Themistokleous, independent MP, said companies had been overcharged under the previous system and required regulatory correction. Fotini Tsiridou, MP of Disy, said the amendment removes unequal treatment of nonresident seafarers.

Lawmakers said the change is part of a broader review of maritime-related policies, as Cyprus seeks to maintain its position as a shipping hub. Ongoing discussions focus on balancing business incentives with funding obligations linked to the social cohesion system.

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Greek And Cypriot Banks Propel Economic Growth With Aggressive Credit Expansion

by THEFUTURE.TEAM

May 25, 2026

Robust Q1 Growth Sets The Stage

Banks in Greece and Cyprus are accelerating lending activity, with total credit expansion projected to approach or exceed €15 billion in 2026. The increase is reinforcing the banking sector’s role in supporting profitability and broader economic growth across the region.

Targeted Lending Initiatives And Sector Performance

According to reports by Greek business outlet Newmoney, banks are increasingly relying on credit expansion to sustain earnings growth as interest rate dynamics shift across Europe. First-quarter results already point to strong momentum in lending activity.

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Eurobank has set a target of €3.8 billion in credit expansion this year. National Bank of Greece and Piraeus Bank are each targeting €3 billion, while Alpha Bank aims for €3.5 billion. Smaller lenders are also expanding aggressively, with CrediaBank targeting €1.2 billion and Optima Bank aiming for €1.1 billion.

Notable Banking Results Across Markets

First-quarter results underline the scale of the lending rebound. Banks that have reported Q1 figures recorded cumulative credit expansion of €4.7 billion. Piraeus Bank increased its loan portfolio to €38.6 billion, while net credit expansion reached €1.3 billion across major business segments. At National Bank of Greece, new loan disbursements rose 50%, contributing to net credit expansion of €500 million.

Meanwhile, Eurobank reported a 9.8% increase in net credit expansion to €1.1 billion. In Cyprus, Bank of Cyprus recorded Q1 lending of €829 million, up 9% compared with the end of 2025, while Optima Bank posted a 27% year-on-year increase in loan disbursements to €1 billion.

Sectoral Dynamics And Asset Quality Improvements

A recent report from UBS showed that business lending remained the strongest growth driver in March, increasing 10.9% year-on-year. Consumer lending rose 7.7%, while housing loans increased 1.1%. Asset quality also continued to improve. Non-performing loans declined to 3.3% in Q4 2025, down 30 basis points from the previous quarter, reflecting the sector’s ongoing balance-sheet clean-up.

Despite the strong lending momentum, profitability remained broadly stable in the first quarter. Combined net profits at major banks, including National Bank of Greece, Piraeus Bank, Eurobank, Optima Bank and Bank of Cyprus, totaled €1.12 billion, representing a marginal year-on-year decline of 0.27%.

Profitability And Revenue Breakdown

Profit trends varied across institutions during the quarter. Net profit at National Bank of Greece declined 9.9%, while Piraeus Bank reported a 1.42% decrease. By contrast, Eurobank increased profitability by 5.3%. In Cyprus, Bank of Cyprus reported a 3% increase in profit, while Optima Bank posted a 22% rise. Across the sector, net interest income increased 1.4% to €1.93 billion, although performance differed among individual banks. Fee income recorded stronger growth, rising 20% year-on-year to €590 million.

Long-Term Trends And Strategic Impact

Over the past year, listed banks in Greece and Cyprus generated combined post-tax profits of €5.458 billion, up 15.4% from the previous year. During the same period, net interest income declined 4.2% to €9.307 billion, reflecting pressure from changing rate conditions.

Balance-sheet quality continued to strengthen as non-performing loans fell to €5.7 billion, down 5.2% compared with December 2024. Since March 2016, banks in the two markets have reduced non-performing exposures by an estimated €101.5 billion, equivalent to a cumulative decline of 94.7%.

The sustained improvement in asset quality, combined with expanding loan portfolios, is reinforcing the sector’s role in financing business activity and economic recovery across Greece and Cyprus.

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