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Cyprus Justice Ministry Commits To Comprehensive Judicial Reforms

The Cypriot Justice Ministry has expressed satisfaction with the European Commission’s (EC) latest Rule of Law report, highlighting ongoing judicial reforms aimed at enhancing efficiency and transparency. This affirmation by the EC underscores Cyprus’s commitment to meeting public expectations through comprehensive judicial changes.

Key Reforms and EC Acknowledgement

The Justice Ministry’s statement underscores the establishment of new courts and the introduction of updated civil procedures as significant milestones. These initiatives are part of a broader strategy to modernise the judicial system. Furthermore, the ministry noted the positive reception of developments such as remote hearings, which particularly benefit children involved in judicial proceedings and the planned online publication of court decisions. These measures are expected to increase accessibility and transparency within the judicial process.

Addressing Pending Cases and Digital Challenges

A critical aspect of the reform is the expedited processing of accumulated pending cases, a project funded by the European Union’s National Recovery and Resilience Plan. This initiative, managed by the Supreme Court Reform Division, has already met its national recovery plan goals, reflecting significant progress in reducing judicial backlogs.

However, the EC report also highlights areas needing improvement, such as the slow pace of judicial digitisation and challenges in recruiting new judges and support staff. These issues represent ongoing obstacles that the ministry must address to ensure the sustainability and efficiency of the judicial reforms.

Implications for Business and Governance

For the business community and governance structures, these reforms hold substantial implications. Efficient and transparent judicial processes are crucial for maintaining investor confidence and ensuring a stable legal environment. By addressing pending cases swiftly and enhancing the accessibility of legal proceedings, Cyprus aims to create a more predictable and reliable judicial landscape. This predictability is vital for business operations and long-term investment planning.

Moreover, the emphasis on alternative dispute resolution methods aligns with global trends towards more amicable and cost-effective legal solutions. This could significantly benefit businesses by providing quicker and less adversarial means of resolving disputes, thereby reducing legal costs and fostering a more collaborative business environment.

Cyprus Tech Sector Propels Economic Growth and Reshapes Talent Landscape

Robust Economic Expansion

At the recent TechIsland Summit, Christophoros Anayiotos, Head of Deal Advisory at KPMG Cyprus, delivered a compelling assessment of the island’s burgeoning tech ecosystem. The 2024 report highlights that the technology sector now contributes 16% of Cyprus’ total Gross Value Added (GVA), up from 12.6% in the previous year. Overall, the sector’s economic impact is estimated at €8.5 billion, with direct contributions of €4.7 billion and an additional €3.8 billion generated indirectly.

Sectoral Contributions and Productivity

Using the Leontief Input-Output Model, the study covers key areas including ICT, professional scientific and technical activities, as well as tech-driven financial and insurance services. Notably, the ICT segment itself delivers €3.4 billion in direct GVA, while professional services and financial operations contribute €840 million and €505 million respectively. This horizontal spread of technological influence underscores the industry’s pivotal role in driving multifaceted business growth.

Resilience During Economic Downturns

Even amid challenging economic conditions, the tech sector has demonstrated remarkable resilience. In the pandemic-stricken year of 2020, while the broader Cypriot economy contracted by 3%, the ICT sector experienced a robust growth rate of 21%. This momentum accelerated further to a striking 38% growth in 2021, reinforcing technology’s role as a stabilizing economic force.

Divergent Trends in Employment

Anayiotos’ analysis reveals that the tech sector now sustains over 62,000 full-time equivalent jobs in Cyprus, with 45,900 direct and 16,300 indirect roles. For every €1 million in increased sector revenue, approximately 13 jobs are generated. Despite the overall employment surge, there has been a significant shift in workforce composition. In 2015, Cypriot nationals comprised 88% of ICT employees; by 2024, this figure dropped to 50%, with non-EU nationals accounting for 42% and other EU citizens 8% of the workforce.

Cyprus as an EU Leader in ICT

Cyprus now holds a prominent place in the EU, ranking second in the EU27 for ICT’s share of national GVA at 11.4%, a notable rise from 9.4% in 2023. Furthermore, the island leads the bloc in ICT GVA growth, posting a remarkable 347% increase between 2015 and 2024. With a top-five ranking in GVA per ICT employee—whereby each contributes approximately €130,000, compared to the EU average of €116,000—the country’s technology workforce has expanded at an annual growth rate of 12.1%, from 9,300 in 2015 to 26,000 in 2024.

Strategic Imperatives for Future Growth

Anayiotos emphasizes the need for strategic enhancements to sustain this expansion. Key recommendations include improving air connectivity, joining the Schengen Area to boost mobility, and attracting more international banking institutions. Additionally, introducing tax incentives designed to favor stock options is considered crucial in luring and retaining skilled talent. Addressing the limited capacity in private education is also vital to accommodating professionals relocating with families.

Investing in Talent and Digital Transformation

Looking forward, investments in education and digital upskilling remain paramount. There is a clear call for a national initiative aimed at promoting STEM careers, elevating the digital skills of both students and educators, and accelerating the digital transformation of public services. Moreover, streamlining legal procedures will be critical to improving the overall business climate and competitiveness.

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