Cyprus EU Presidency Emphasizes Cohesion Policy For Economic Resilience

by THEFUTURE.TEAM

February 27, 2026

Setting A Focused Agenda

During the inaugural General Affairs Council on Cohesion Policy under the Cyprus EU Presidency, Finance Minister Makis Keravnos reinforced the pivotal role of cohesion policy in enhancing competitiveness and bolstering economic resilience across the European Union. In Brussels, Minister Keravnos highlighted the significance of Cyprus’ six-month tenure at the helm of the Council, marking a defining moment for strategic policy reform.

Cohesion Policy And Strategic Autonomy

Addressing colleagues upon his arrival, Keravnos stated, “It is a great pleasure for me to chair today’s meeting on Cohesion Policy, which is the first since Cyprus took over the Presidency.” He emphasized that an autonomous Union, open to the world, is built on the foundation of competitiveness and strategic economic resilience. This approach not only underscores the value of cohesion policy in the European agenda but also directly links it to the Union’s broader objectives of strategic autonomy.

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Key Agenda Items And Future Directions

The Council’s discussions will center on two principal items. The first is the adoption of conclusions regarding cities and functional urban areas, which are seen as critical engines for economic, social, and territorial cohesion. The second focuses on the mid-term review of cohesion policy for the 2021-2027 programming period. This review aims to design stronger incentive frameworks and introduce greater flexibility for the next cycle, thereby ensuring closer alignment with the EU’s strategic priorities in a shifting economic and geopolitical landscape.

Toward An Enhanced Policy Framework

Experts anticipate that the meeting will further delve into bolstering the administrative and operational capacities of member states and regions. Additional discussions are expected to highlight targeted support for regions facing specific geographical and development challenges, including the EU’s eastern border areas. These measures aim to forge a more robust and agile policy framework, better equipped to navigate the uncertainties of the current global environment.

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Cyprus Central Bank Reports Sharp Decline In New Loans For January 2026

by THEFUTURE.TEAM

March 8, 2026

Overview Of Lending Trends

The Central Bank of Cyprus (CBC) reported a marked downturn in total net new loans for January 2026. The figures reveal a decline of €377.7 million in net new loans compared with the previous month, reflecting broader adjustments in both consumer and housing credit markets.

Detailed Lending Activity

Net new loans in January totaled €247.3 million, based on €495.9 million in total new lending. In December 2025, net new loans reached €625.0 million from €986.9 million in total lending. Changes were recorded across several credit categories. Net new consumer loans increased slightly to €18.9 million from €17.2 million in December. Housing loans declined to €95.7 million from €135.4 million in the previous month.

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Interest Rate Movements

Interest rates for both consumer and housing loans declined slightly during the period. Consumer loan rates fell to 7.20% from 7.22%, while housing loan rates decreased to 3.70% from 3.78%. Deposit rates showed limited changes. Household term deposits remained at 1.20%, while deposits from non-financial corporations increased to 1.34% from 1.27%.

Comparative European Context

In comparison with other euro area countries, lending rates in Cyprus are close to the median for outstanding loan balances. Margins for households are around 0%, while margins for non-financial corporations stand at approximately 0.4%. The transmission of monetary policy in Cyprus broadly follows developments in the wider euro area, particularly during periods of monetary tightening or easing. However, the pass-through of rate changes to new loans, especially those issued to non-financial corporations, appears lower than in some other euro area markets.

Shifts In Borrower Behavior And Market Dynamics

The CBC report also highlights changes in borrower preferences regarding interest rate structures. The share of new housing loans with variable interest rates has declined from nearly 100% in early 2022 to 11.6%. Fixed-rate loans have become more common in new housing lending, although many of these products later transition to variable rates.

Banking Liquidity And Deposit Rates

In addition to lending trends, the Central Bank of Cyprus noted that deposit rates in Cyprus remain among the lowest in the euro area. High liquidity levels within the banking system contribute to this trend. Cypriot banks reported a liquidity coverage ratio of 319% in December 2025, compared with a euro area median of 192% and an EU average of 161%. These liquidity levels influence the pricing of deposits in the domestic market. Changes in policy interest rates have also shown limited pass-through to new deposits, reflecting the structure of Cyprus’s relatively small banking sector. The CBC report highlights ongoing developments in both lending and deposit conditions within the country’s banking system as economic conditions and borrowing preferences continue to evolve.

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