By Vakis Charalambous
- Member of the Central Committee of AKEL
- Economist
The government keeps repeating that it allocated over one billion euros, to be precise. The President speaks of money that was “invested,” the Minister of Finance of amounts that were “allocated,” and the Government Spokesperson of measures that were “taken.” But announcing something is one thing, deciding on it is another, and actually spending it is yet another. And above all, spending money is one thing, while providing real relief to society is another.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
In March 2025, the government reported that measures totaling over €845 million had been “decided upon.” Today it speaks of one billion, without a detailed breakdown: how much has been disbursed, how much represents estimated tax revenue losses, and how much relates to announcements through 2027?
The issue is not merely an accounting one, but a deeply political one. This same figure lumps together one-time subsidies, ongoing government obligations, budget expenditures, and European funding. This creates an inflated picture to serve the government’s political narrative.
For example, in the “Renovate–Rent” program, with a budget of €25 million, approved grants totaled just €1.2 million as of February 2026. Similarly, the €30 million for “Solar Panels for All” was included in a broader €90 million plan and does not constitute an additional amount. Similar examples of duplication and overlap exist in other cases as well.
Statutory benefits, scheduled cost-of-living adjustments, and increases in benefits—such as child allowances and benefits for low-income pensioners—cannot be lumped together and labeled as new decisions that run counter to fiscal prudence. Social welfare, support for people with disabilities and their families, education, student assistance, and housing policy are long-standing obligations of the state. Nor are the ATA and wage adjustments automatically considered extraordinary state interventions. The same applies to pre-existing or co-funded programs, such as tuition and meal subsidies, electric vehicles, and energy upgrades.
Not every social benefit and every government program can be presented as a measure against inflation. Social and housing policies are obligations of the state, not acts of government generosity, especially when social welfare funds are being reduced as a share of total spending, remain underutilized, and housing needs are growing.
However, even if we accept all the announcements, the most important question remains unanswered: How effective were the measures, ultimately?
In September, inflation reached 5.2% in Cyprus, compared to 3.8% in the Eurozone. Cumulative price increases continue to put pressure on household incomes. Approximately 167,000 of our fellow citizens are at risk of poverty or social exclusion, while one in three seniors is at risk of poverty.
But there is another side to the story, one that the government avoids highlighting. It is not just a matter of how much it claims to have given to society, but also how much more it has taken from it.
From 2023 through September 2026, the cumulative additional tax revenue, compared to 2022 levels, exceeds €6 billion, of which approximately €2 billion comes from VAT. The increase may not be due solely to inflation, however, the government—at least in its announcements—has decided to return approximately €550 million in subsidies, tax breaks, and one-time support payments over the next five years.
In reality, the government has joined the pre-election campaign, conflating the state’s obligations with measures to combat inflation, which remain inadequate and belated.
The success of an anti-inflation policy is not judged by how much it cost the state, but by how much it eased the cost of living for citizens. And the reality is far removed from the image the government seeks to create by repeatedly citing figures intended to make a splash.
