Cabinet to meet to discuss cost of living measures (updated)

Cabinet is set to hold an extraordinary meeting on Thursday with the aim of discussing and approving a new package of measures to alleviate the cost-of-living crisis.

The meeting comes in light of the forthcoming expiry of the fuel tax subsidy, which Finance Minister Makis Keravnos had said on Tuesday would not be extended past its planned expiry date of next Monday.

However, on Thursday morning, President Nikos Christodoulides was asked about the possibility of it being extended past next Monday and said “let’s wait for the cabinet discussion to take place.”

He also said the government would soon announce a range of measures, some being across-the-board measures, and some being targeted at specific groups.

“This government has proven from the very first day, with actions, not words, that it has only one priority; the improvement of ordinary people’s everyday lives,” he said.

He mentioned the previous packages of measures as well as other initiatives brought in by his government, including the introduction of the cost-of-living allowance, the raising of the minimum wage in December, and the “photovoltaics for all” plan.

He then said the government’s plan is to mainly announce targeted measures on Thursday, saying they will be aimed at “combatting the challenges faced by our most vulnerable compatriots in terms of the cost of living.”

He then turned his attention to points raised by opposition parties, saying “I want to remind the Cypriot people that cheap proclamations made by some after we announced previous measures were made by those who led this country to its second-biggest disaster after the Turkish invasion of 1974.”

Referring to the financial crisis of the early 2010s, he said, “let me remind you what happened in 2012 in this country. We, as a responsible government, are accountable to only the Cypriot people. We are not going to be drawn into policies which will endanger this country again.”

According to the Cyprus News Agency (CNA), the government is considering extending the electricity subsidy until the end of June. The subsidy was extended in February until April 30, having first been introduced in October.

At the time of its introduction, the subsidy was worth around €70 per bimonthly bill for average consumers, but reductions in the price of oil since then have blunted the value of the subsidy to around a €14 reduction for the average consumer.

In addition to the electricity subsidy, the government is also reportedly considering extending the scrapping of VAT on basic products until the end of June.

The government’s announcement in February extended the zeroing of VAT through the end of May, with Keravnos having said earlier this month that it has had “significant benefits for consumers.”

The current list of zero-VAT products includes meat, fish, and vegetables, as well as bread, milk, eggs, baby food and nappies, feminine hygiene products, and adult incontinence underwear.

“The average benefit to consumers from the application of zero VAT on the products covered by the measure amounts to approximately €7.50 on purchases totalling €95, or eight per cent,” Keravnos said earlier this month.

The government is also reportedly considering extending various social welfare measures taken in February, which at the time included a set of financial benefits for vulnerable members of society, including single-parent families and internally displaced persons.