Nicosia: Labour and Social Insurance Minister, Marinos Moushouttas, has identified pension system reform as the government's most crucial social priority for 2026. Speaking at a European Economic and Social Committee (EESC) Workers' Group meeting at the SEK trade union building, Moushouttas emphasized that the pension reform is a fundamental component of the European social model.
According to Cyprus News Agency, Moushouttas highlighted the challenges of ensuring the long-term sustainability of the social insurance system amidst demographic aging and increasing life expectancy. He pointed out the necessity for pensions to remain adequate and decent, emphasizing that the balance between sustainability and social adequacy is non-negotiable. The reform's first pillar, the Social Security Fund, aims to bolster pension adequacy and modernize investment policies. The second pillar involves strengthening provident funds, with a target to implement the reform by January 2027.
Moushouttas acknowledged the challenges of negotiating the reform, but expressed optimism that mutual trust would lead to success, benefiting workers and pensioners alike. Lucie Studnicna, President of the EESC Employees' Group, stressed the importance of quality work, adequate wages, and strong worker representation for European competitiveness. She noted that around 1 in 5 Europeans are at risk of poverty, with over a million homeless.
SEK General Secretary, Andreas Matsas, underscored the need to enhance social dialogue and collective agreements to address elderly poverty. He emphasized that 33% of Cypriot pensioners live below the poverty line, and reform should prevent any pensioner from falling below this threshold. Trade union PEO's General Secretary, Sotiroula Charalambous, highlighted the impact of geopolitical events on workers and called for a fairer tax system and enhanced social policy to tackle housing crises.
Charalambous also discussed growing social and economic inequalities, attributing them to successive crises that have burdened workers. She criticized deregulation and privatization policies for undermining the European social model. Additionally, she highlighted the unequal distribution of wealth in Cyprus, noting that the top 10% of earners have significantly increased their wealth.
Regarding minimum wages, the Labour Minister announced a legislative review of a bill, with parliamentary discussions set for September. He noted that the minimum wage in Cyprus stands at 1,088 euros per month as of January 2026. Unemployment is at 4.3%, below the Eurozone average, with an employment rate exceeding 81%.
Moushouttas also mentioned efforts to expand collective agreements across more economic sectors, with trade unions providing suggestions to the Ministry of Labour. Dimitris Mavrommatis, representing the Deputy Minister of State for European Affairs, acknowledged the EESC's contributions to the Cyprus Presidency of the EU Council, highlighting achievements in various policy areas and ongoing dialogue with social partners.