Web T: Parliamentary Discussion of Cyprus’s 2027 State Budget to Begin Today

Macro/Political:

• PDMA announced that the Bond auction scheduled for October 14, 2026 will not take place.
  Source:PDMA
• Greek Prime Minister Kyriakos Mitsotakis said on Friday that US Secretary of State Marco Rubio’s visit to Athens had reaffirmed Greece’s role as an indispensable strategic partner in the Eastern Mediterranean, while insisting that an electricity interconnector with Cyprus could proceed without compromising Greek sovereign rights. He also reaffirmed Greece’s commitment to maintaining a qualitative edge in defence capabilities, citing the planned acquisition of F-35 fighter jets and the modernisation of F-16s. Turning to the Great Sea Interconnector (GSI), Mitsotakis said the project could and should proceed without concessions on Greek sovereign rights, declining to discuss operational details of what he described as a sensitive issue. Furthermore, he added that the US supported connectivity projects and described the cable as a European rather than merely a Greek Cypriot undertaking.
  Source: Kathimerini
• Greek Prime Minister Kyriakos Mitsotakis has set an election result of around 25% as the threshold at which his leadership could face serious questions, responding publicly to speculation about a possible replacement before the formation of the next government. Mitsotakis reiterated his goal of securing an outright parliamentary majority, arguing that the central issue was whether Greece could be governed stably under difficult circumstances. He also defended his party’s ideological direction, invoking former conservative leader Konstantinos Karamanlis and arguing that politics should move beyond traditional labels of centre, right and left.
  Source: Kathimerini
• The Overall Industrial Production Index in August 2026 recorded an increase of 5.8% (y-o-y). The Overall IPI in January 2024 increased by 10.3%(y-o-y). The seasonally adjusted Overall Industrial Production Index in August 2026 recorded a decrease of 0.8% compared with December 2024 (m-o-m).
  Source: ELSTAT

Markets:

• Metlen, Thales Alenia Space, a joint venture between Thales and Leonardo, and Thales Hellas today announced the signing of a collaboration agreement to jointly prepare for potential opportunities under the Greek defence telecommunications space programme. The cooperation agreement brings together the complementary capabilities of the three companies to support Greece’s ambition to strengthen its sovereign autonomy in the space domain, while maximising the contribution of the national industrial ecosystem through technology transfer and skills development. The agreement also aims to support the development of high-value industrial and technological capabilities in Greece’s space sector.
  Source: Euronext Athens

Macro/Political:

• The discussion of the 2027 State Budget will open today in the Parliamentary Finance and Budget Committee, with the participation of the Minister of Finance, the President of the Fiscal Council and the Governor of the Central Bank. The first session is expected to focus on state revenues, fiscal indicators, economic policy, the sustainability of public finances and the outlook for the Cypriot economy. It is important to note that, according to the latest statement by the Ministry of Finance, the new budget is balanced and people-centred, serving as the most important instrument of economic policy, particularly at a time when the country needs stability and clear direction amid negative geopolitical developments in the region and internationally. Furthermore, the state budget is expected to record a fiscal surplus, which is projected to reach around 4% of GDP in 2027, while public debt is also expected to continue declining, with the debt-to-GDP ratio projected to fall to 45.2% by the end of 2027. The economy is expected to grow by 2.9%, while unemployment is projected to stand at 3.8% and inflation is forecast to ease to 2.5%.
  Source: Stock Watch
  

Markets:

• Bank of Cyprus, in a presentation outlining the bank’s future goals and strategy, announced that it is focusing on strengthening its non-interest income, delivering a ROTE of over 20% while maintaining a strong capital ratio. As highlighted by its management committee, a key strength is the EUR 700mn capital buffer available for potential acquisitions, primarily in the wealth management sector. At the same time, the bank is monitoring the emerging trend towards, and the need for, cross-border banking mergers within Europe. However, the bank’s management remains selective in its lending to both businesses and individuals, with CEO Panicos Nicolaou stressing during the presentation of the bank’s performance that “Loan pricing must make sense”.
  Source: Euro2Day