Breaking news

European Court Of Human Rights Rejects Claims Over Cyprus Public Sector Pay Cuts

by THEFUTURE.TEAM

November 17, 2025

The European Court of Human Rights (ECtHR) has dismissed five claims submitted by 450 public and related sector employees and retirees from Cyprus. The cases, filed under Constantinou and Others v. Cyprus, challenged the constitutionality of measures enacted during the economic crisis, including pay and pension deductions. The decision is of particular importance in the context of the nation’s public finances.

Details Of The Case

The claimants contested the constitutional validity of Law 168(I)/2012 and Law 112(I)/2011. These laws mandated temporary cuts and extraordinary contributions on salaries and pensions for public sector employees. Prior to reaching the ECtHR, similar appeals had been rejected by Cyprus’s Supreme Court, adding weight to the contested decisions.

Follow THE FUTURE on LinkedIn, Facebook, Instagram, X and Telegram

Claims And Legal Arguments

The litigants argued that the measures violated their right to property (as provided by Article 1 of Protocol No. 1) and their right to a fair trial (guaranteed by Article 6). Some claimants further alleged discrimination compared to their counterparts in the private sector.

Court’s Reasoning

The ECtHR found no basis for claims of unequal treatment. The court clarified that public sector employees are inherently distinct from private sector workers because their wages and pensions are directly linked to the state budget. In addressing the issue of a fair trial, the Court concluded that there was no deviation in the legal reasoning of the Supreme Court, the decisions of which were adequately substantiated.

Justification And Public Interest Considerations

While acknowledging that the pay and pension cuts did interfere with the right to property, the ECtHR emphasized several critical points:

The measures were enacted in accordance with national law;
They were upheld as constitutional by the Supreme Court;
They addressed a compelling public interest during an era of severe economic crisis;
The deductions were proportionate and implemented on a gradual basis;
They were designed to be temporary; and
A fair balance was maintained between the exigencies of public interest and the rights of the claimants.

Decision And Key Voices

The ruling, delivered by a majority of five judges, was accompanied by dissenting opinions from Judges Georgios Sergidis and Anna Adamska-Gallant. The case was argued on behalf of the General Public Prosecutor by the Senior Advocate of the Republic, Theodora Christodoulidou.

Implications For Cyprus

This decision underscores the judiciary’s deference to legislative measures implemented in times of crisis, illuminating how such measures are scrutinized against constitutional safeguards while balancing public interests. The ECtHR’s stance may influence future legislative actions regarding public sector finance amidst economic challenges.

For further context on the legislative measures in question, refer to pay and pension cut regulations.

The Future Forbes Realty Global Properties

ECB Launches Geopolitical Stress Tests For 110 Eurozone Banks

The European Central Bank is preparing a new round of geopolitical stress tests aimed at assessing potential risks to major financial institutions across the euro area. Up to 110 systemic banks, including institutions in Greece and the Bank of Cyprus, will take part in the exercise, which examines how geopolitical events could affect financial stability.

Timeline And Testing Process

Banks are expected to submit initial data on March 16, 2026. Supervisors will review the information in April, while the final results are scheduled to be published in July 2026. The process forms part of the ECB’s broader supervisory work to evaluate financial system resilience under different risk scenarios.

Follow THE FUTURE on LinkedIn, Facebook, Instagram, X and Telegram

Geopolitical Shock As The Primary Concern

The stress tests place particular emphasis on geopolitical risks. These may include armed conflicts, economic sanctions, cyberattacks and energy supply disruptions. Such events can affect banks through changes in market conditions, borrower solvency and sector exposure. Lending portfolios linked to regions or industries affected by geopolitical developments may face higher risk levels.

Reverse Stress Testing: A Tailored Approach

Unlike traditional stress tests that apply the same scenario to all institutions, the reverse stress test requires each bank to define a scenario that could significantly affect its capital position. Banks must identify a geopolitical shock that could reduce their Common Equity Tier 1 (CET1) ratio by at least 300 basis points. Institutions are also expected to assess potential effects on liquidity, funding conditions and broader economic indicators such as GDP and unemployment.

Customized Risk Assessments And Supervisor Collaboration

This methodology allows banks to submit risk assessments based on their own exposures and operational structures. The approach is intended to help supervisors understand how geopolitical events could affect institutions differently and to support discussions between banks and regulators on risk management and contingency planning.

Differentiated Vulnerabilities Across Countries

A joint report by the ECB and the European Systemic Risk Board indicates that countries respond differently to geopolitical shocks. The Russian invasion of Ukraine led to higher energy prices and inflation across Europe, prompting central banks to raise interest rates. Belgium, Italy, the Netherlands, Greece and Austria experienced increases in borrowing costs and lower investor confidence. Germany, France and Portugal recorded more moderate changes, while Spain, Malta, Latvia and Finland showed intermediate levels of exposure.

Conclusion

The geopolitical stress tests will not immediately lead to additional capital requirements for banks. Their results will feed into the Supervisory Review and Evaluation Process (SREP). ECB supervisors may use the findings when assessing capital adequacy, risk management practices and operational resilience at individual institutions.