The government hit back at Akel on Saturday after the main opposition party said Cypriots have been left at the mercy of sweeping price hikes.

Left-wing Akel criticised ruling Disy for failing to take the necessary measures to protect locals from inflation.

In a written statement, the party used the example of Germany, which announced a VAT cut to 7 per cent from 19 per cent until March 2024. Meanwhile, the Cypriot government has claimed the EU does not allow a general VAT cut, Akel said, while it delays the VAT reduction on fuel and electricity which was passed by parliament.

The government also failed to demand regulations at a European level to reduce electricity prices on the island, Akel added.

It also supported that the government should have utilised the “hundreds of millions of euros” from VAT to help the needy, which are suffering the most from price increases.

The party reiterated its proposal to tax the excess profits of energy companies, a policy followed by other countries, which has so far been rejected by the government.

When it comes to serving the interests of banks and big businesses, “they find solutions overnight” while for workers and vulnerable groups the government finds “all kinds of excuses”, the party added.

In response, government spokesman Marios Pelekanos said that policies are not “copy-paste” from other realities and that the party has wrongly isolated one proposal by the German government.

“Let them finally focus on the realities of our own country,” Pelekanos said.

He noted how the government has implemented support measures amounting to €350m for households, small and medium-sized businesses, with a special focus on vulnerable groups. This was done while fully covering VAT difference from 9 per cent and 5 per cent to 19 per cent, as well as all the increases from July onwards.

The spokesman said the government is evaluating measures for taxing the excess profits of energy companies.

He also mentioned how rating agencies refer to the successes of the Cypriot economy, giving the example of the recent report of the International Monetary Fund, but also Friday’s announcement by Moody’s, which Service upgraded the outlook of the Cyprus economy.