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MP stresses importance of public investments for Cyprus

Cypriot MP Christiana Erotokritou stressed the importance of public investments for Cyprus due to the disproportionate immigration and demographic pressures the country is facing and the adverse effects of climate change. 

Erotokritou who is the President of the Cyprus House  Finance and Budget Committee, intervened in Budapest during a meeting of the Inter-Parliamentary Conference on Stability, Economic Coordination and Governance in the European Union.

In her intervention regarding Cyprus, she noted that the country is on a steady path of public debt reduction, maintaining healthy fiscal surpluses, however, it presents a large current account deficit.

She pointed out that the country-specific recommendations of the European Commission for Cyprus highlight the imperative need for full and timely implementation of the Recovery and Resilience Plan to reduce the country’s excessive dependence on oil and accelerate the completion of the necessary reforms and investments.

In this context, Erotokritou said it is important to have public investment for Cyprus due to the disproportionate immigration and demographic pressures the country is facing and the adverse effects of climate change.

Erotokritou stressed that the key challenge is to balance fiscal discipline and sustainable development, ensuring that fiscal responsibility, sustainable development and social cohesion go hand in hand and that the economic governance framework contributes to addressing current and emerging challenges of the EU and shaping a more hopeful future for all European citizens.

Cyprus Tax-To-GDP Ratio Rises To 36.3% In 2025

Cyprus’ tax-to-GDP ratio edged up to 36.3% in 2025, from 36% in 2024, remaining below the European Union and euro area averages, according to Eurostat.

Across the EU, the ratio rose to 40.7% from 40.2%, while the euro area average increased to 41.3% from 40.7%.

EU Tax Revenues Reach €7.68 Trillion

The tax-to-GDP ratio measures revenue from taxes and net social contributions as a share of gross domestic product. It provides an indication of public revenue relative to the size of an economy, although national tax systems and social contribution rules vary.

EU governments collected €7.68 trillion in taxes and social contributions in 2025, an increase of €401 billion compared with the previous year.

France Records Highest Ratio

France had the EU’s highest tax-to-GDP ratio at 46%, followed by Belgium at 44.7%, Denmark at 44.3% and Austria at 43.9%.

At the other end of the scale, Ireland recorded the lowest ratio at 22.7%. Romania followed at 29.3%, Malta at 30.3% and Bulgaria at 30.6%.

Ratios Increase In 19 Member States

The tax-to-GDP ratio rose in 19 EU countries in 2025. Germany recorded the largest increase, climbing from 40.3% to 41.4%. Malta’s ratio rose from 29.3% to 30.3%, while Spain’s increased from 37.2% to 38.1%.

Eight member states recorded declines. Sweden saw the largest fall, from 41.8% to 41.2%, followed by Latvia, where the ratio dropped from 34.9% to 34.2%.

Cyprus’ 0.3-percentage-point increase was more modest than some of the changes elsewhere in the bloc. Its ratio nevertheless rose alongside the EU and euro area averages, reflecting a broader increase in tax and social contribution revenue relative to economic output.

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