Cyprus must accelerate the implementation of its national Recovery and Resilience Plan and reduce its dependence on fossil fuels with a focus on the development of electricity interconnections, the European Commission said on Wednesday.
The 2023 country reports take stock of the socio-economic challenges in every Member State, and outline to what extent these are being addressed in the countries’ plans.
Included recommendations aim to help implement the Green Deal Industrial Plan.
Cyprus continues to experience imbalances after experiencing excessive imbalances until 2022 as vulnerabilities related to private, government, and external debt have overall declined but remain a concern, it said.
The report listed four recommendations for 2023 and 2024, including an end to the current energy support measures by the end of 2023.
“Should renewed energy price increases necessitate support measures, ensure that they are targeted to protect vulnerable households and businesses, are fiscally affordable and maintain incentives to save energy,” it said.
The commission’s report notes that maintaining a sound fiscal position in 2024 requires maintaining nationally financed public investment and ensuring effective absorption of Growth and Resilience Facility grants and other EU funds, in particular to promote the green and digital transitions.
It suggests that for the period beyond 2024, Cyprus should continue to pursue investments and reforms that contribute to higher sustainable growth and maintain a prudent medium-term budgetary position.
Secondly, the report advises the need to speed up the implementation of the recovery and resilience plan to quickly finalise the REPowerEU fund with a view to a swift start of its implementation.
Thirdly, measures to improve the governance of state-owned companies in line with international standards are also needed.
And lastly, a reduction in the island’s dependence on fossil fuels, including diversifying energy supply, is necessary.
“Accelerate the development of electrical interconnections. Expand and accelerate energy efficiency measures, also to tackle energy poverty, as well as the shift towards sustainable transport. Intensify policy efforts aimed at providing and acquiring the skills needed for the green transition,” the report said.