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ECB Warns High Energy Costs Are Hurting Cyprus Businesses

The European Central Bank (ECB) has recently published an incisive policy paper detailing how Europe’s disjointed energy framework continues to put firms at risk through high and disparate energy costs. The report raises significant concerns for Cyprus, where industrial electricity prices substantially outpace those recorded by many of its EU counterparts.

Rising Energy Costs For European Firms

According to recent data from Eurostat, Cyprus recorded the second-highest electricity prices for non-household consumers in the EU during the second half of 2025 at €24.29 per 100 kilowatt-hours. Only Ireland reported higher prices at €25.52, while Germany followed at €22.64. By comparison, electricity prices were significantly lower in Finland and Sweden at €7.48 and €9.70 respectively, highlighting the cost disparities facing industries across the bloc.

Structural Vulnerabilities And Broader Implications

The ECB paper, titled Energy Security and Industrial Competitiveness: The Case for a European Energy Union, argues that Europe’s dependence on imported fossil fuels continues to expose the region to geopolitical risks and long-term competitiveness challenges. The report notes that electricity and gas account for roughly 22% of industrial energy use in Cyprus, compared with 87% in Luxembourg. At the same time, the ECB said retail energy prices across Europe remain highly fragmented despite signs of convergence in wholesale gas markets.

Economic Impact On Firms And Policy Recommendations

Medium-sized companies across the EU paid an average of €0.19 per kilowatt-hour for electricity and €0.06 for natural gas during the second half of 2024, according to the ECB study. Businesses in Cyprus, however, continue paying substantially more for electricity than firms operating in lower-cost markets such as Finland. ECB analysts also noted that larger corporations are often better positioned to secure lower energy prices through long-term agreements, preferential grid access and tax exemptions, while smaller companies remain more exposed to market volatility.

Path Forward: Toward A European Energy Union

Looking ahead, the ECB underscores that the shift towards renewable energy will require a more integrated infrastructural approach across Europe. The authors advocate for a robust European Energy Union, laying out five policy priorities: expanding cross-border electricity infrastructure, enhancing green finance mechanisms, investing in grid digitalisation and storage, harmonising energy taxation, and developing a coherent industrial strategy for clean technologies. For Cyprus, these measures are particularly vital given its exposure to high electricity costs and limited interconnection with larger EU networks.

Strategic Investments And Future Resilience

Separately, independent power transmission operator Admie recently secured approval to seek funding from the European Investment Bank for a due diligence study related to the Greece-Cyprus electricity interconnector project.

The initiative, supported through discussions involving Cypriot, Greek and EU officials, aims to refine the project’s technical and economic framework while attracting additional investment. The ECB concluded that a more integrated European energy framework would strengthen both energy security and industrial competitiveness across the region.

Eurobank Wins Two Euromoney Awards Following Cyprus Merger

Eurobank has been named Cyprus’ Best Bank for 2026 by Euromoney, while also receiving the award for Best Bank for Large Corporates at the publication’s latest Awards for Excellence.

Merger Marks A Milestone

The awards recognise the bank’s performance during 2025, a year marked by the completion of the legal merger between Hellenic Bank and Eurobank Cyprus. The transaction created Eurobank Limited, which the group says is now Cyprus’ largest banking and insurance organisation, with assets exceeding €28 billion.

Euromoney’s Awards for Excellence evaluate banks’ performance over the previous calendar year, with this edition covering January 1 to December 31, 2025.

Lending, Customers And Digital Growth

Eurobank said its business lending portfolio expanded by around 17 per cent during 2025, while its customer base grew to more than 710,000 retail clients and 11,500 business customers.

The bank also continued its digital expansion, saying more than 96 per cent of transactions are now completed through digital channels, and most financing applications are submitted via its mobile app.

Expanding International Presence

Eurobank also highlighted the opening of its first representative office in India, describing the move as a step toward strengthening business links between Cyprus and India while supporting Cyprus’ role as a gateway to the European Union for Indian businesses and investors.

According to the bank, Euromoney recognised not only the successful completion of the merger but also its lending growth, digital transformation and contribution to Cyprus’ position as an international business and investment hub.

CEO On The Awards

“The Euromoney awards confirm Eurobank’s strong momentum and the successful implementation of our group’s strategy in Cyprus,” Chief Executive Michalis Louis said.

He said the merger strengthened the bank’s ability to support households, businesses and the wider economy, while highlighting continued investment in digital services and the opening of the representative office in India as key milestones during the year.

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