Finance Minister Makis Keravnos has called for greater flexibility in EU spending rules to allow Cyprus and other member states to support households and businesses while investing in energy security, as the conflict in the Middle East increases uncertainty over growth and inflation.
Speaking at a European financial council (Ecofin) meeting on Friday in Luxembourg, Keravnos said the escalation of the conflict was intensifying economic risks, with households and businesses already under pressure.
He said greater EU energy independence required investment in electricity generation and storage, but warned that the transition would take time and require substantial funding when governments had limited room to spend.
Cyprus therefore “supported further flexibility under the EU’s economic governance framework to finance immediate support measures alongside longer-term investment and reforms”, he said.
Keravnos further cautioned that “any changes must be carefully designed to avoid undermining the sustainability of public finances”.
He also welcomed an agreement on the EU’s market integration package, describing it as an “honest compromise” that balanced differing national positions, although it did not meet all of Cyprus’s initial demands.
The agreement aims to make it easier for financial companies operating throughout Europe to reduce regulatory differences and strengthen supervision of financial markets.
Keravnos congratulated the Irish presidency for securing the deal, which he said built on progress made during Cyprus’s EU council presidency.
Keravnos reiterated Cyprus’s support for completing the EU’s banking union, arguing that a more unified banking sector would help reduce barriers between national markets and improve competitiveness.
He said future legislation should simplify procedures and address the fragmentation of banking services while maintaining financial stability.