The European Commission has placed Cyprus amongst its top performers on fiscal discipline, approving the draft state budget for 2026 submitted by the Finance Ministry.
In its autumn European Semester package released yesterday, the Commission listed Cyprus amongst 12 eurozone member states that submitted budget drafts compliant with the European fiscal framework, alongside Greece, Estonia, Finland, France, Germany, Ireland, Italy, Latvia, Portugal and Slovakia.
The Commission flagged risks of non-compliance in the budgets of Spain, Croatia, Lithuania and Slovenia, and significant risks in Malta’s and the Netherlands’ budgets.
The Commission also assessed fiscal developments and prospects in other member states. Seven countries were assessed as compliant: Austria, Belgium, Czechia, Denmark, Sweden, Poland and Romania. Three member states were assessed as at risk of non-compliance: Bulgaria, Hungary and Spain.
Debt repayment capacity confirmed
The Commission published post-programme surveillance reports for Ireland, Greece, Spain, Cyprus and Portugal—countries that received economic support during the extended financial crisis—assessing their economic, fiscal and financial condition with emphasis on repayment capacity. The reports concluded that all five member states retain their debt servicing capacity.
For the first time, the Commission proposed a Council recommendation on human capital. The new recommendation addresses all 27 member states and calls for urgent action to tackle structural challenges related to human capital that could harm competitiveness.
The recommendation calls on member states to prioritise education and skills required in strategic sectors for the EU economy, from the clean transition, circular economy and industrial decarbonisation to health and biotechnology, agriculture and bioeconomy, and the defence industry and space.
The Commission is therefore calling for stronger programmes in science, technology, engineering and mathematics (STEM). It also demands a reversal of the negative trend in basic skills, which is necessary to develop a future workforce with strong foundations to work and train in new technologies and competitive sectors.
Finally, the Commission stressed the importance of high-quality and timely data and analysis that keeps pace with economic evolution and can anticipate emerging professions, so policies can respond to today’s and tomorrow’s needs rather than yesterday’s.