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Minimum Wage Increase to €1,088 Sparks Divergent Reactions

by THEFUTURE.TEAM

December 29, 2025

The Ministerial Council’s decision to set the minimum wage at €1,088 has ignited debate among key social partners. With the announcement drawing sharp criticism from both trade unions and employers, the issue promises to fuel further discussions in the coming days after a brief pause during the Christmas celebrations.

Policy Announcement and Initial Reactions

Trade unions have already signaled their discontent, arguing that government measures appear to favor employers rather than support employees. In parallel, employer representatives have expressed concerns that the increase does not accurately reflect the scale of the Cypriot economy. Both sides are expected to convene separate meetings soon—union representatives possibly meeting before the end of 2025, with employers scheduling their session on January 14, 2026—to deliberate the next steps following the holiday period.

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Economic Implications and Warning Signals

The Observatory of Economic and Business (OEB) has taken the debate a step further by warning that this adjustment could set off a chain reaction in the economy. The report highlights that the proportional increase in the minimum wage may lead to a rise in overall price levels and could eventually strain businesses. Companies attempting to absorb the extra cost might be forced to pass on these expenses to consumers, thereby unsettling the delicate balance of market competitiveness and sustainability.

Analyzing the Real Costs

A closer look at the new minimum wage reveals that the €1,088 figure is only part of the equation. The statutory employer contributions—amounting to 15.4%—raise the total cost for employers to approximately €1,255 per month. This figure comprises allocations for Social Insurance (8.8%), General Healthcare System (2.9%), Social Cohesion Fund (2%), Surplus Personnel Fund (1.2%), and additional contributions (0.5%). Companies that also contribute to the Welfare Fund may see an extra 5% added, pushing the cost even higher.

Impact on Employee Take-Home Pay

For employees, the situation is equally nuanced. Deductions totaling approximately 11.25%—including Social Insurance at 8.8% and General Healthcare contributions at 2.65%—reduce the take-home pay to around €963, despite the gross salary being set at €1,088. Workers on short-term contracts, whose minimum wage has been raised from €900 to €979, encounter even steeper deductions, resulting in net earnings of roughly €867 per month.

In sum, while the minimum wage increase appears to be a welcome change for some, the practical implications reveal a more complex economic landscape. Both employers and employees must now navigate the real cost dynamics, which extend far beyond the advertised gross salary.

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Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

by THEFUTURE.TEAM

June 26, 2026

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

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Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.