The European Commission recommends that Cyprus speed up the implementation of its recovery and resilience plan, and reduce reliance on fossil fuels placing an emphasis on developing electricity interconnections, in the context of country-specific recommendations issued as part of the 2023 European Semester Spring Package.

The package focuses on what needs to be done so member states build a robust and future proof economy that secures competitiveness and long term prosperity in the face of a challenging geopolitical environment. This, the Commission notes in a press release, requires an integrated approach across all policy areas: promoting environmental sustainability, productivity, fairness, and macroeconomic stability.

Among other elements included in the package, the Commission has assessed the existence of macroeconomic imbalances for the 17 Member States, including, Cyprus, selected for in-depth reviews in the 2023 Alert Mechanism Report.

“Cyprus is experiencing imbalances after experiencing excessive imbalances until 2022 as vulnerabilities related to private, government, and external debt have overall declined but remain a concern,” according to the European Commission.

Regarding the post-programme surveillance report issued for Cyprus (along with those for Ireland, Greece, Spain and Portugal), the Commission finds that Cyprus and the other countries that have benefited from financial assistance programmes retain the capacity to repay their debt.