Speech by the Minister of Finance of the Republic of Cyprus, Mr Makis Keravnos, at the working dinner for the Board members of the European Investment Bank

From:

Ministry of Finance

29/09/25 20:24 | Speech / Address | Economy and Finance

Welcome to Lemesos.

It is a true pleasure to welcome you all to Cyprus, and we sincerely appreciate the effort each of you has made to join this important gathering, which underscores the strong dedication and close collaboration that make the European Investment Bank (EIB) Group’s work so impactful.

At this point, please allow me to extend a particularly warm welcome to the President Calvino, my dear friend Nadia, and to express my gratitude and satisfaction of her achievements since assuming the EIB’s Presidency. I am confident that she will continue with commitment the successful implementation of the EIB Group’s Strategic Roadmap.

I would also like to warmly thank you for the kind invitation to join you this evening, and for choosing Cyprus for this important internal gathering of the EIB Group. Your presence here is a powerful symbol of the Group’s commitment to every member state, including those at the Union’s easternmost frontier, and reflects the enduring partnership and shared values that bind us together.

It is worth highlighting that the EIB, as the European Union’s long-term lending institution, alongside the European Investment Fund (EIF) as its dedicated arm for Small and Medium-sized Enterprises (SMEs) and innovation, has stood for more than four decades as a trusted partner for Cyprus, consistently transforming European priorities into tangible investments on the ground.

This evening provides a great opportunity to exchange views on our common priorities, especially as Cyprus prepares to assume the Presidency of the Council of the European Union (EU) in 2026. That milestone represents a profound responsibility: to contribute actively to shaping the Union’s collective future, at a time when clarity of vision and unity of action are more necessary than ever.

We remain fully committed to ensuring continuity and building on the agenda of previous presidencies, with priorities closely aligned to the Union’s strategic objectives. We will work to strengthen Europe’s competitiveness by advancing the Capital Markets Union and the Savings and Investments Union, while also taking further steps towards the Digital Euro. Its adoption is of pivotal importance in ensuring that Europe remains at the forefront of the digital era, while also strengthening the Union’s autonomy and global competitiveness.

At the same time, we view positively the ongoing work on the revision of the EU securitisation framework, recognising its potential to channel more investments into the real economy. Emphasis should be placed on simplifying due diligence requirements and introducing proportionality, while safeguarding financial stability and supporting a safe and transparent securitisation market.

Beyond these priorities, our Presidency will contribute to reaching an agreement on the post-2027 Multiannual Financial Framework, ensuring that the EU budget responds effectively to emerging challenges while sustaining long-term growth and cohesion. At the same time, we will attach particular importance to strengthening Europe’s defence and security, reinforcing cohesion policy as a cornerstone of solidarity, and nurturing the Union’s strategic partnerships.

Throughout this work, Cyprus will engage closely with the European Commission and all member states, determined to deliver tangible progress and to contribute to a stronger, more resilient, and more competitive Europe.

Today, we find ourselves at a critical moment. Our Union faces a convergence of complex and deeply interrelated challenges, from rising geopolitical tensions and economic uncertainty to the urgent need for a green and digital transition. At the same time, this period offers immense opportunities. With its unrivalled financial strength and strategic focus, the EIB Group is uniquely positioned to help all member states, and especially smaller economies such as Cyprus, navigate these challenges and transform opportunity into meaningful, measurable, and lasting impact.

In this context, I would also like to briefly highlight the performance of the Cypriot economy. Over the past two years, our country has shown strong resilience and adaptability, achieving one of the highest growth rates in the Eurozone. This progress reflects prudent fiscal policies that have yielded tangible results, leading to conditions of full employment, a robust fiscal surplus, and a consistent decrease in public debt.

During the first half of 2025, growth is estimated at 3.2%. In the same period, the General Government budget balance reached a surplus of 2.4% of Gross Domestic Product (GDP), with a primary surplus of 3.2% of GDP.

The debt-to-GDP ratio is expected to fall at 57% by the end of this year, from 68.2% in 2024.

Unemployment in the second quarter of 2025 was 4.3% and inflation is expected to average close to zero for the full year 2025.

Cyprus has for decades benefited from a strong and long-lasting partnership with the EIB Group. During this period, the EIB has invested more than €5.7 billion in our country, making Cyprus the largest per capita beneficiary of EIB support among EU member states. Τhe EIF has supported Cypriot SMEs and mid-caps in accessing funding through various initiatives, such as the Cyprus Entrepreneurship Fund (CYPEF), mobilising up to €540 million to support innovation and entrepreneurship across the country. Additionally, the EIF manages the Cyprus Equity Fund (CEF), a €30 million fund-of-funds aimed at providing early-stage venture capital to innovative startups.

At the same time, the Bank has supported projects across key sectors through loans, guarantees, and advisory services – from infrastructure and energy to innovation, and more recently to dual-use strategic investments – providing flexible financing terms, technical expertise, and high standards of governance. In particular, the EIB has contributed to improving project design and execution, with technical assistance exceeding €2.2 million over the past decade, reducing administrative burden and enhancing the quality and impact of investments.

Your visit this afternoon to the Western Lemesos Biological Wastewater Treatment and Recycled Water Production Unit highlights the tangible results of our cooperation. Co-financed by the EIB, this landmark project demonstrates our shared commitment to the green transition, modern infrastructure, and sustainable development.

Such initiatives embody the true essence of our partnership with EIB Group, delivering concrete improvements to citizens’ daily lives while at the same time reinforcing competitiveness and long-term sustainability, highlighting the EIB Group’s role as a trusted long-term partner for Cyprus.

The EIB Group’s strategic priorities are clearly defined and closely coordinated with the Union’s overarching goals. As Europe’s climate bank, the EIB channels resources into renewable energy, water management, and the circular economy. It is also accelerating digitalisation and innovation, supporting transformative technologies such as artificial intelligence and life sciences. At the same time, the EIB contributes to Europe’s security and defence, strengthens modern social infrastructure, and supports cohesion policy, while mobilising high-impact investments beyond EU borders. These priorities provide a strong framework for member states to advance sustainable growth, resilience, and strategic autonomy.

Looking forward, the challenges we face are significant, but so too is the opportunity to shape a sustainable and resilient Europe. By working closely together, we can ensure that the EIB Group’s strategic priorities translate into concrete, measurable benefits not only for Cyprus, but for all member states.

I am confident that through our shared focus on innovation, green growth, and strategic investment, we will strengthen our Union, deliver lasting impact, and secure a prosperous future for generations to come.

I am also deeply confident that the partnership between Cyprus and the EIB Group will continue to flourish. I look forward to building on this foundation, deepening our collaboration, and achieving even greater impact in the years ahead, ensuring that the benefits of our work continue to be felt across every corner of our Union.

On the occasion of the completion of Mr Kyriakos Kakouris’ mandate as Vice President of the EIB, I would like to express my sincere and profound appreciation for his consistent support and excellent cooperation over the past two years.

Long before his appointment to the EIB, I had the privilege of working closely with Kyriakos at the Ministry of Finance during my first term as a minister, and more recently, over the past two years, I have once again had the opportunity to collaborate with him in a different capacity – this time witnessing firsthand his exceptional dedication, commitment, and spirit of partnership.

As both a trusted colleague and a personal friend, Kyriakos has played a key role in deepening the partnership between Cyprus and the EIB, paving the way for significant achievements that have advanced our shared goals. His efforts have driven forward important projects, upheld the highest standards of professionalism, and strengthened confidence and trust at every level. His vision and commitment have not only benefited Cyprus and its people, but have also contributed meaningfully to the EIB’s mission and to the broader European project.

Thank you, Kyriakos, for your outstanding service, your friendship, and your strategic vision. Your contributions have left a lasting impact, and I am confident they will continue to bear fruit for the EIB, for Cyprus, and for European citizens in the years to come.

Wishing you all the best in your future endeavours, and above all, good health and prosperity for you and your family.

In conclusion, I hope that during your stay, you will enjoy our country, its culture, and the warmth of our hospitality, and that the discussions we have today will inspire fruitful collaboration in the years to come.

Thank you.

(GS/NZ)

Speech by the Minister of Finance of the Republic of Cyprus, Mr Makis Keravnos, at the working dinner for the Board members of the European Investment Bank

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