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Cyprus Records EU’s Highest Budget Surplus As Public Debt Falls Below 50% Of GDP

Cyprus recorded the European Union’s highest budget surplus in 2025, at 3.6% of GDP, and the bloc’s largest quarterly reduction in public debt in the second quarter of 2026, according to data released by CYSTAT and Eurostat on 21 October.

The figures highlight Cyprus’s strong fiscal position at a time when many EU countries face budget deficits, rising borrowing costs and pressure to increase public spending.

Budget Surplus Reaches €1.36 Billion

Cyprus’s public expenditure stood at 37.9% of GDP, compared with the EU average of 50%. The country was among just five EU member states to record a budget surplus in 2025, alongside Denmark, Greece, Ireland and Portugal.

The surplus reached €1.36 billion, or 3.6% of GDP. Social insurance organisations contributed €1.34 billion, while central government recorded a surplus of €2.1 million and local government added €22.9 million.

Total public revenue rose to €15.9 billion, supported by a 10% increase in income and wealth tax receipts and an 8.4% rise in social contributions. Public sector wages increased by 7.6% and social transfers by 5.3%, while capital expenditure grew by 46.4%.

Public Debt Falls Below 50% Of GDP

Cyprus’s public debt declined to 48.5% of GDP in the second quarter of 2026, down three percentage points from the previous quarter, marking the largest quarterly reduction in the EU. Greece followed with a 2.7-point decline, while Hungary recorded a two-point fall.

Year on year, Cyprus’s debt ratio dropped by 9.5 percentage points, from 58.1% to 48.5%. Only Greece recorded a larger reduction, at 11.2 percentage points.

Cyprus Gains Fiscal Flexibility As EU Debate Continues

The figures come amid debate over whether EU fiscal rules should allow greater flexibility for governments facing higher energy costs and growing pressure to support households.

Countries including Italy, France and Greece have called for exceptional social support spending to be excluded from the limits of the Stability and Growth Pact. However, the European Commission and fiscally conservative member states, including Germany and the Netherlands, have resisted broader exemptions over concerns about financial market stability.

With its budget surplus and debt below the EU’s 60% threshold, Cyprus has greater room to finance targeted domestic support, including VAT relief on essential goods and electricity subsidies, while remaining within the bloc’s fiscal framework.

The government nevertheless continues to support targeted flexibility at EU level for member states facing greater fiscal pressure.

Europe’s Deadly Summer Heat Exposed The Cost Of A Warming Continent

Europe experienced its deadliest summer for heat-related deaths on record in 2026, with an estimated 24,400 excess deaths linked to extreme temperatures across 30 countries. Researchers estimate that human-induced climate change was responsible for around 32,000 of the deaths attributed to heat in the study’s broader analysis, accounting for 65% of the total.

The findings highlight the growing public-health consequences of global warming, largely driven by fossil fuel use, as extreme heat becomes more frequent and severe.

A Summer Of Dangerous Heat

Between June and August, heatwaves pushed temperatures in Western Europe to an average of 2.9°C above the 1991–2020 norm, with some days reaching 12°C above average. Nearly a third of estimated heat-related deaths occurred during a particularly intense heatwave between 17 June and 1 July.

“These numbers are a stark reminder that our hotter, more extreme summers are having an increasingly severe impact on public health,” said Dr Clair Barnes, a researcher at Imperial College London and co-author of the study.

The estimated toll exceeded previous peaks of around 29,000 deaths in summer 2022 and 28,000 in 2003 across the region studied.

How Researchers Estimated The Toll

Researchers modelled the relationship between temperature and mortality across 854 urban areas in the EU, UK, Norway and Switzerland, covering around 40% of the population in the 30 countries studied.

The analysis incorporated temperature records, age, socioeconomic conditions, environmental factors and access to healthcare. By comparing actual temperatures with those expected without human-induced warming, the team estimated the additional deaths attributable to climate change.

Final official mortality figures for summer 2026 are not yet available in many countries, and heat-related deaths are often underreported because their effects can be difficult to identify directly.

Older People Face The Greatest Risk

People aged 85 and over accounted for roughly half of the estimated deaths. However, the impact extended across age groups, with around 800 excess deaths among adults aged 20–44 and approximately 6,000 among people under 65.

Southern Europe experienced the highest mortality burden, reflecting hotter temperatures and other vulnerabilities, including air pollution, limited green space and unequal access to healthcare and heat-alert systems.

Italy, France And Spain Record Highest Toll

Italy recorded an estimated 13,303 heat-related excess deaths, followed by France with 7,268 and Spain with 6,824. Germany recorded around 6,340, while the UK saw an estimated 4,354 deaths.

In the UK, the heat also placed significant pressure on healthcare services. Andrew Hartle, Professor of Practice of Anaesthesia at Imperial College Healthcare, said demand during the summer resembled that of a severe winter virus season.

Cities Urged To Strengthen Heat Protection

Researchers say cities can reduce the risks through climate shelters, external shading and building retrofits, alongside measures to help residents avoid exposure during the hottest hours. Checking on vulnerable people, staying hydrated and following heat alerts are also important.

The researchers stress that adaptation must go hand in hand with reducing fossil fuel use to limit further warming. The findings underline that extreme heat is already a major public-health threat across Europe, with thousands of lives at risk each summer.

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