Finance minister hails Cyprus role in advancing EU economic agenda

Cyprus’ Presidency of the Council of the European Union made a significant contribution to advancing major legislative files in the fields of the economy and public finances, Finance Minister Makis Keravnos said on Tuesday as he presented the presidency’s record in areas under his ministry’s responsibility. In addition, he said the presidency helped strengthen the competitiveness of the European economy, advance customs reform, deepen capital markets, enhance tax cooperation and support Ukraine. Speaking during a press conference, Keravnos described the six-month presidency as both highly demanding and exceptionally productive. He said that Cyprus had assumed the rotating presidency of the Council during a period marked by severe geopolitical instability, including the war in Ukraine, the conflict in Gaza, developments across the Middle East and their consequences for Europe’s economy and energy security. The minister stated that these circumstances made it essential for the European Union to adopt decisions that would reinforce its competitiveness and resilience, with the Cypriot presidency placing policies promoting sustainable growth, fiscal stability and the bloc’s strategic autonomy at the centre of discussions within the Economic and Financial Affairs Council (ECOFIN). Keravnos said he had chaired five ECOFIN meetings, one General Affairs Council meeting dedicated to cohesion policy, as well as the informal meetings of EU finance ministers and central bank governors, together with ministers responsible for cohesion policy, all of which were hosted in Cyprus. According to the minister, the presidency’s principal objective was to strengthen the European Union’s financial autonomy while creating the conditions for greater productivity and competitiveness across the European economy. A major focus of the presidency was the Savings and Investments Union, which Keravnos described as a cornerstone of European competitiveness. He said the Cypriot presidency promoted a series of legislative initiatives aimed at increasing the efficiency of European capital markets by simplifying the regulatory framework without weakening investor protection. Within that framework, he said, substantial progress was achieved on the Market Integration and Supervisory Package, which forms a central element of the EU’s strategy to establish a more integrated financial system benefiting both investors and businesses. Keravnos explained that the issue was discussed during three separate ECOFIN meetings, with the Cypriot presidency submitting working papers and questions to member states that helped bridge differing positions and advance negotiations. He also said the Council had reached agreements on several legislative proposals concerning supplementary pensions, particularly the revision of the Pan-European Personal Pension Product (PEPP), making it more attractive, accessible and financially sustainable. According to Keravnos, the changes are designed to remove restrictions that have limited the product’s widespread adoption since its introduction in 2019, opening up new opportunities for investment and increasing market liquidity. The minister also pointed to significant progress in financial services, including revisions to sustainability disclosure rules, advancement of the EU retail investment strategy and progress on the new directive governing payment services. He said these measures are intended to improve transparency, strengthen consumer protection, combat fraud in electronic payments and expand investment opportunities for both citizens and businesses. Turning to the presidency’s first policy pillar, Keravnos referred to the implementation of the EU’s new economic governance framework, agreed in 2024, together with the coordination of member states’ economic policies through the European Semester. He also highlighted progress towards completing the Recovery and Resilience Facility, saying that 20 decisions approving amendments to national recovery plans were adopted during Cyprus’ presidency. The minister also referred to the European Union’s continuing financial support for Ukraine, saying the Cypriot presidency helped resolve outstanding issues delaying the implementation of a decision to provide the country with a €90 billion loan. He said those efforts enabled the European Commission to disburse the first €3.2 billion instalment in June. “Cyprus, as a country that continues to experience the consequences of the Turkish invasion and occupation, has consistently supported every effort to strengthen states facing similar circumstances,” Keravnos said. The minister also outlined progress on the European Union budget and the new Multiannual Financial Framework for the 2028 to 2034 period. He said the Cypriot presidency succeeded in moving negotiations from the technical to the political level, helping bridge significant differences among member states. According to Keravnos, Cyprus handed over the first negotiating framework containing indicative financial figures, achieving common positions in key policy areas and laying the foundations for a timely agreement on the European Union’s next seven-year budget. He described it as particularly important that cohesion policy remained an independent European policy, saying it is directly linked to boosting competitiveness and reducing development disparities between regions. On taxation, Keravnos said member states had agreed on new rules to strengthen the fight against VAT fraud through enhanced cooperation between national authorities, the European Public Prosecutor’s Office and the European Anti-Fraud Office (OLAF). He explained that the new arrangements would allow faster access to essential information, making investigations into cross-border tax fraud more effective. The minister also said the Cypriot presidency had made substantial progress in discussions on the taxation of tobacco and nicotine products, submitting what he described as a balanced proposal that received broad support and paved the way for the Irish presidency to complete the agreement. Keravnos devoted particular attention to the reform of the Union Customs Code, describing it as the most significant overhaul of the customs union since its creation in 1968. He said the agreement provides for the creation of a state-of-the-art single European customs data hub, serving as a central information exchange platform to improve traceability and strengthen the efficiency of customs controls. The reform also introduces simplified procedures for trusted economic operators, establishes a European customs authority, and creates a single handling fee for small parcels entering the European Union. Keravnos added that, following intensive negotiations, agreement had also been reached to strengthen the Carbon Border Adjustment Mechanism (CBAM), while the European Union approved the temporary suspension of customs duties on key nitrogen fertilisers, a measure expected to reduce costs for farmers and lessen the bloc’s dependence on Russia and Belarus. Asked what Cyprus had gained from holding the presidency, Keravnos said the greatest benefit was the international recognition of the Cypriot public administration’s and its experts’ ability to manage complex European legislative files. He said the work carried out during the presidency had been recognised by European institutions, European Commissioners and ministers from member states, demonstrating that Cyprus is capable of playing a meaningful role in shaping European policy. “Cyprus proved that it possesses the human capital capable not only of addressing national issues but also of designing and implementing European policies,” Keravnos said. He added that the successful completion of the presidency had strengthened Cyprus’ voice and credibility within the European institutions.