Inflation, protests and wages: Cypriots demand justice

Trade unions and employers in Cyprus plan to review the Cost of Living Allowance (CoLA) mechanism in light of rising living costs, following a recent large-scale strike.

The strike, held on September 11, brought together representatives of both the public and private sectors. Participants demanded the full restoration of the CoLA system, which provides for automatic wage indexation in line with inflation.

Unions announced that an island-wide meeting will take place next Wednesday to discuss the outcomes of the protests, as well as next steps, including the possibility of escalating pressure if negotiations fail.

The employers’ side is also preparing for key decisions. On October 2, a joint session of the executive committees of the Employers and Industrialists Federation (OEV) and the Chamber of Commerce and Industry (KEVE) is scheduled. The main goal is to form a common position not only on CoLA but also on related issues such as tax and pension reforms.

OEV Director General Michalis Antoniou stressed that the business community does not support the idea of "CoLA for all" in its current form. He noted that the Ministry of Finance had previously proposed an option whereby the allowance would be granted to all workers, but in varying amounts depending on income levels.

According to Antoniou, employers are conducting economic assessments and considering different scenarios, taking into account competitiveness, inflation and household expenses.

Labor Minister Yiannis Panayiotou had already presented a compromise proposal before the strike, under which the CoLA allowance would be paid to all workers but differentiated by income level.

Finance Minister Makis Keravnos, for his part, expressed hope for an agreement. He called it "unimaginable" that the sides would fail to reach consensus, especially given the current macroeconomic conditions. He noted that Cyprus is the only EU country where inflation temporarily dropped to zero after a period of negative rates, making this an especially favorable moment for compromise.

At present, the sides remain firm: unions insist on full restoration of CoLA payments, while employers voice concerns over rising costs and reduced competitiveness. The government continues to call for dialogue and a balanced solution.