The long-awaited cost-of-living allowance (CoLA) agreement, signed Thursday after months of tough negotiations between employers and workers, has drawn mixed reactions across Cyprus’ political spectrum.

Disy, on Friday, welcomed the social partners’ deal as a step toward safeguarding labour peace and supported the 4 per cent inflation ceiling set for implementing CoLA, which helps limit its negative side effects to some extent.

However, the party maintained its view that “an attempt should have been made to modernise the institution, as the government had initially announced, in order to ensure much more effectively the sustainability of public finances and the competitiveness of our economy.”

Disy emphasised that “the weaknesses of the institution remain,” noting that CoLA is paid uniformly regardless of salary, a feature that disproportionately benefits high-wage earners.

They also pointed out that extending CoLA to the national minimum wage “simply confirms what was decided from the outset when our government introduced this important institution.”

“Our most serious concern,” Disy added, “relates to the inevitable further expansion of the state payroll, in connection with general increases and mass hiring.”

Akel described the agreement as a significant milestone in labour rights progress but emphasized that it does not mark the end of the effort.

“The trade union movement fought a months-long battle to protect and secure the CoLA,” Akel stated, adding that their success “reaffirmed that through struggle, workers can win and expand their labour rights.”

The party promised to continue to demand, together with the trade union movement, the expansion of the CoLA so that it covers all workers, aiming to guarantee that “workers can live with dignity.”

“The agreement on the CoLA signed yesterday [Thursday] is a milestone, but it is not the end of the road,” Akel said.

The Ecological Movement, like Akel, pledged to continue advocating for a policy that “meets the needs of society as a whole.”

The movement acknowledged positive steps, such as the planned full restoration of the CoLA to 100 per cent within 18 months in areas where it is already applied but described the it as insufficient.

“Our position is clear and firm: The CoLA must be awarded universally, to all employees, and in a staggered manner, so that the support is proportional to actual needs and inversely proportional to the level of the salary,” the movement stated.

Highlighting ongoing affordability challenges, it added that decisions affecting citizens’ purchasing power must prioritise effective support for the most vulnerable, rather than partial measures.

“The universal, fair and socially balanced implementation of the CoLA is a matter of social justice, dignity and protection of work.”

The newly decided-on permanent agreement expands CoLA coverage to over 55,000 additional beneficiaries.

The allowance will gradually increase from the current 66.7% to 80% of the cost-of-living rise starting January 1, 2026, then to 90 per cent on July 1, 2026, and finally to 100 per cent on January 1, 2027.

Adjustments will be made annually, tied to Cyprus’ real GDP growth, with a maximum CoLA increase capped at 4 per cent. In the event of an economic downturn, the labour advisory board will meet to review and recommend measures.