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Cyprus-Greece Ferry Secured Through 2027 As Government Weighs Future Subsidy

Cyprus’ passenger ferry service to Greece will continue through 2027, but the government will decide next year whether state support should continue from 2028, according to Deputy Shipping Ministry Director Kyriakos Aliouris.

The current contract, which began in 2022 and was initially agreed for three years with an option for another three, has been extended through 2027. Aliouris said the operator remains obliged to provide the service under the existing terms.

“There is no issue at the moment,” he said, stressing that the sea connection between Cyprus and Greece will operate normally next year.

Demand Remains A Challenge

The route’s longer-term future remains uncertain. Scandro Holding Ltd Chief Executive Charalambos Manoli has warned that 2027 could be its final year without continued state support if passenger demand does not increase enough to make the service financially sustainable.

Operating from late May to early September, the ferry carries around 100 passengers per sailing in June and 200-250 in July, while most sailings are full only in August.

“You can’t run a sustainable line for three months,” Manoli said, pointing to the need for the vessel to generate revenue beyond the peak season.

Government To Review The Route

Aliouris said the subsidy was initially introduced because there was no reliable data on demand. After five years of operation, the ministry now has enough information to assess the route’s performance.

Passenger traffic has increased year on year, while the service also caters to people unable or unwilling to fly, as well as travellers taking vehicles or pets to Greece.

Bookings in 2026 reached around 8,900 passengers, 2,700 vehicles and 371 pets, compared with 8,238 passengers, 2,660 vehicles and 379 pets in 2025.

Fuel costs and future EU carbon charges will also factor into any decision on further support. Aliouris said any new subsidy would need to reflect market and regional conditions at the time. The final sailing of the 2026 season is scheduled for September 1 from Piraeus.

Cyprus Government Surplus Rises To €1.61 Billion In First Nine Months Of 2026

Cyprus recorded a general government surplus of €1.61 billion in the first nine months of 2026, equal to 4.0% of gross domestic product, as revenue growth outpaced the rise in public spending. Higher receipts from income taxes, social contributions and value-added tax (VAT) drove the improvement, while lower capital expenditure helped restrain spending.

Preliminary figures released Tuesday by the Statistical Service of Cyprus show the surplus rose to €1.17 billion, or 3.0% of GDP, up from € 442.1 million in the same period of 2025.

Total government revenue increased 6.5% to €12.09 billion, while expenditure rose 2.9% to €10.48 billion.

Key Fiscal MeasureJanuary–September 2025January–September 2026
Total revenue€11,353.9 million€12,091.8 million
Total expenditure€10,186.2 million€10,482.1 million
Government surplus€1,167.6 million€1,609.7 million
Surplus as a share of GDP3.0%4.0%

Income Taxes And VAT Lead Revenue Growth

Taxes on income and wealth made the largest contribution to the increase in revenue. Receipts in this category climbed by €442.2 million, or 15.3%, to €3.34 billion, compared with €2.89 billion a year earlier.

Social contributions rose by €235 million, or 6.6%, to €3.78 billion. Taxes on production and imports increased by €251.5 million, or 7.2%, reaching €3.77 billion.

Net VAT receipts, after refunds, totalled €2.64 billion, up €293.1 million, or 12.5%, from €2.35 billion in the first nine months of 2025.

Some Revenue Streams Decline

Not all revenue categories moved higher. Capital transfers fell by €74.6 million to €96.7 million, while current transfers declined by €71.6 million, or 20.5%, to €278.2 million.

Revenue from services slipped 1.0% to €743.5 million. Interest and dividend receipts dropped by €37 million, or 28.6%, to €92.4 million.

Social Benefits And Personnel Costs Increase

On the expenditure side, social benefits rose by €199.6 million, or 4.9%, to €4.27 billion. Compensation of employees—which includes imputed social contributions and public-sector pensions—increased by €108.3 million, or 3.8%, to €2.99 billion.

Intermediate consumption, covering goods and services used in the delivery of public services, rose by €114.3 million, or 11.0%, to €1.16 billion. Interest payments increased by €8.7 million, or 2.6%, to €340.7 million. Current transfers were up €68.7 million, or 10.6%, at €714.7 million.

Lower Capital Spending Limits Expenditure Growth

The overall increase in spending was tempered by a decline in capital expenditure. Capital-account spending fell by €189.9 million, or 16.9%, to €936.2 million from €1.13 billion in the same period last year.

Investment in fixed capital declined by €94.1 million, or 12.1%, to €686.4 million. Other capital transfers fell by €95.8 million, or 27.7%, to €249.8 million. Subsidies also decreased, dropping by €13.9 million, or 15.5%, to €75.8 million.

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