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EU PolicyWatch

Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure CY-2022-22/2821 – measures in Cyprus

Electricity support package for citizens and businesses

Πακέτο μέτρων για την ηλεκτρική ενέργεια

Country Cyprus , applies nationwide
Time period Open ended, started on 27 May 2022
Context War in Ukraine
Type Legislations or other statutory regulations
Category Responses to inflation
– Support for energy bills
Author Loucas Antoniou (INEK) and Eurofound
Measure added 09 September 2022 (updated 05 October 2022)

Background information

The aim of the package is to support household consumers, the vulnerable groups of consumers and businesses to cope with the one going increases of electricity production as a consequence of the increasing of the energy raw materials and the war in Ukraine. The package is included among the measures taken by the Cabinet on 27 May 2022 to confront the inflation and the increasing of prices of essential goods.

Content of measure

The supporting energy package consist of the following measures:

  • Extension of the Decree, which was first issued in December 2021, that provides for the reduction of the VAT rate for electricity from 19% to 9% for all household consumers and to 5% to the vulnerable groups of consumers
  • Increase of the allowance for the Beneficiaries of Photovoltaic Systems and Thermal Roof Insulation as follows: 1. For vulnerable consumers from €750 to €1000 and 2. For household consumers from €250 to €375
  • Extension of the list of the vulnerable consumers of energy by adding an extra number of 19,500 household units receiving an annual gross income up to €19,500
  • Increase from 90% to 100% of the covering of the annual electricity consumption from the produced electricity from the photovoltaic systems for own use for both household and business consumers. In this way, household and business consumers will be able to cover all of their energy needs through the photovoltaic systems
  • Speeding up and simplifying the procedures for the installation of licenced ‘Renewable Energy Source’ systems for buildings that already received their planning permits.

Use of measure

Currently, there is no an estimation of the number of people/consumers and companies that are benefited by the measures of the electricity support package.

Target groups

Workers Businesses Citizens
Does not apply to workers Applies to all businesses Applies to all citizens

Actors and funding

Actors Funding
National government
European Funds
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A

Involvement

The designing of the measures of the package has been performed among the members of the Cabinet and no social partner or political party has been invited to participate in any kind of consultation. Similarly, social partners and political parties have no involvement in the implementation of neither measure of the package.

Views and reactions

On 22 June 2022, the Movement for Social Democracy (EDEK) said that citizens pay the cost for the inaction and the wrong decisions of the government and the purchase of greenhouse pollutants, which are distributed in the electricity bills of the citizens with a levied VAT. EDEK suggests ceilings in electricity prices and the reduction of the VAT rate to 5% and only on the consumption part of electricity bills. Additionally, the Reference of the bill by the President provoked the reaction of the major opposition party. The General Secretary of the ‘Progressive Party of Working People’ (AKEL) on 1 August 2022 said that the ‘referral of the President is a challenge for the society and workers. He also said that the President and the ruling party easily pass bills for the support of the large businesses and economic interests and refuse to demand measures from the EU for the support of the workers and SMEs. Similarly, the Democratic Party (1 August 2022) said that the decision of the President ‘deprives citizens of the immediate relief they would have had from the unbearable cost of electricity… Unfortunately, the government does not seem to understand either the magnitude of the problems faced by citizens or society's need for immediate relief measures’.

Sources

Citation

Eurofound (2022), Electricity support package for citizens and businesses, measure CY-2022-22/2821 (measures in Cyprus), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/CY-2022-22_2821.html

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