President Nicos Christodoulides outlined more than 55 policy initiatives for 2026 on Wednesday, spanning economic reform, energy security, digital transformation and social welfare, in his annual governance planning address at the Presidential Palace.
Speaking before cabinet members, state officials, judicial representatives and diplomatic missions, Christodoulides said that his government has proceeded with clear objectives, strong political will and determination since taking office.
“Tonight, looking you in the eyes, I assure you that 2026 finds us in a fairly mature phase of implementing what we have promised you,” the president said, adding that policies designed by the government are being implemented with tangible results touching everyone’s daily lives.
The government is faithfully implementing its governance programme – what Christodoulides described as a social contract with all citizens – through the ideological framework of social liberalism, an approach that combines individual progress with social solidarity whilst strengthening the welfare state.
On the international front, Christodoulides said the international standing of the Republic of Cyprus is being upgraded “by general admission” thanks to the country’s multidimensional foreign policy with clear European-Western orientation and without any ambivalence.
“Our homeland is now recognised for what it truly deserves: a stable and secure cooperation hub, a responsible and reliable partner in a region of particular geostrategic importance,” he said.
The announcement centred on five priority areas: foreign policy and defence, economic resilience, state modernisation, transparency and anti-corruption measures, and citizen welfare.
The president characterised the highest objective as security – security in the economy, in employment, in education, in health, in every aspect of daily life.
Energy and foreign policy gains prominence
In the energy sector, Christodoulides announced that Cyprus expects to sign an agreement with Israel in 2026 for the development and exploitation of the Aphrodite gas field, “thus closing a long-standing issue” and taking another substantial step towards utilising the country’s energy resources.
Detailed planning for the field’s development is expected to be completed within the year, marking a significant milestone towards the Final Investment Decision.
Commercial agreements for the Kronos and Aphrodite fields are scheduled for signature by March, whilst developments are also anticipated for the Kronos field regarding exports of Cypriot natural gas to Europe.
The government will continue technical preparations, in cooperation with the European Commission, aiming for full integration into the Schengen Zone, further strengthening the country’s security framework.
Cyprus will leverage its EU Council Presidency to enhance its footprint in Brussels whilst deepening relations with regional countries. Following emphasis on Africa in 2025, the government will pursue closer ties with countries of special interest, including India and Central Asian states. Christodoulides announced he will visit India in May at the invitation of the Indian Prime Minister.
Defence modernisation receives €1.2bn boost
The president described strengthening the deterrent power of the National Guard as “a matter of national importance” in an era of geopolitical fluidity and instability, particularly as the occupation of the homeland continues.
The government will issue tenders in 2026 for the upgrade of the Evangelos Florakis Naval Base and the modernisation of the Andreas Papandreou Air Base, in cooperation with the European Union and the United States.
The European SAFE programme, with total funding of €1.2bn, will be utilised to acquire modern equipment that will upgrade the country’s defensive armour whilst supporting the Cypriot defence industry. Opportunities arising from Cyprus’s participation in American armament programmes will also be pursued.
Additional measures include upgrading training for National Guard personnel, improving conditions for SYOP contract soldiers, and modernising individual equipment for reservists and National Guard members.
Migration and prison system overhaul
On migration, Christodoulides expressed satisfaction that through the government’s approach, “Cyprus is no longer considered an attractive destination,” with irregular arrivals reduced by more than 85 per cent and returns increased by more than 77 per cent.
He announced the government’s decision to remove supplementary protection status or residence permits from foreign nationals who commit criminal offences, with the aim of immediate repatriation.
“Indicatively, I mention that in the last two months, more than 1,000 people have been deported,” the president said.
To address chronic prison overcrowding, the government is advancing a fundamental restructuring of the country’s correctional system, including planning for a new correctional facility outside urban areas. Procedures for rapid return of foreign convicts held for minor offences are being promoted, whilst deportation of migrants who commit crimes is being expedited.
Within 2026, the electronic monitoring system for prisoners will be strengthened, and in combination with legislation criminalising the introduction, use and possession of mobile phones, security will be substantially enhanced. A Directorate of Organised Crime will also be operational in 2026, with specialised capabilities for tackling modern forms of criminality in cooperation with foreign police authorities.
Pension reform
On the economic front, Christodoulides described a strong and resilient economy as the driving force and basic prerequisite for implementing government policies. The year began with implementation of tax reform, “one of the most emblematic reforms of recent decades,” resulting in less tax burden and more disposable income.
The government will now proceed with another emblematic reform concerning the country’s pension system.
“We are submitting legislation for better and more dignified pensions, in a simple, substantial and sustainable way, to strengthen our pensioners, ensure adequate income, and narrow the gap between women and men,” the president said.
In innovation and entrepreneurship, Cyprus ranks first in Southern Europe and 15th globally, whilst holding first place in the European Union on taxation matters and second place regarding entrepreneurship incentives for innovative companies.
To further enhance competitiveness, the government is promoting the establishment of a Business Development Organisation to support and finance entrepreneurship and innovation, with emphasis on small and medium-sized and start-up enterprises. The Companies Law is being modernised to improve the business environment by simplifying and improving procedures.
Within 2026, privatisation procedures for the Cyprus Stock Exchange will proceed, thus enhancing its international competitiveness and small and medium-sized enterprises’ access to alternative sources of financing.
Cyprus as regional logistics hub
Christodoulides announced the decision to create a modern supply chain network operating in synergy with the country’s ports and airports. A central element of this effort is the development of special supply and storage zones at Larnaca and Paphos airports.
“This is an initiative that highlights our country as a strategic partner in the India-Middle East-Europe corridor (IMEC) and substantially strengthens its position as Europe’s entry point for Asian and African markets,” he said.
To serve the local economy and further expand the productive sector, construction of a port in Vasilikos is being promoted, with tenders for construction works to be issued within 2026, whilst studies for the development of Larnaca port are being completed.
Digital transformation
Following significant services already offered digitally, more than 100 new digital services will be introduced in 2026, with new information systems to be implemented in the Social Insurance Department, Road Transport Department and Police.
The Digital Citizen application, currently serving more than 135,000 citizens, is being upgraded by adding new services such as purchasing tickets for sporting events and child identity features.
On safe use of social media by children, which “justifiably concerns society and government,” Christodoulides announced the government is proceeding with the preparation of an action plan, in cooperation with European Union partners, to utilise age verification applications to protect children online.
Regarding artificial intelligence, an action plan is being implemented, with the first Cypriot AI Factory to be launched in the immediate future, providing access to supercomputing infrastructure. Simultaneously, creation of a national supercomputer is being promoted in cooperation with an American giant.
Land registry and urban planning reforms
Continuing reforms include a comprehensive redesign of Land Registry procedures, accelerating examination of applications through electronic submission and simplifying the method of calculating transfer fees. Simultaneously, a new legislative framework is being promoted for rational utilisation of state land, based on the principles of transparency and equal treatment.
Open tender procedures are being introduced for properties of high commercial value, the rent review process is being improved, and the scope of state land utilisation is being expanded to cover new needs and uses serving the public interest.
Urban and spatial planning is also being modernised in 2026 through revision of local plans for Nicosia, Limassol, Larnaca and Paphos, publication of the first revised chapter of the Policy Statement, preparation of the first 10 pilot urban land consolidation schemes, introduction of a new simple fee calculation system for building permits, extension of fast-track licensing to listed buildings, and modernisation of the building coefficient transfer procedure.
Anti-corruption measures
Expressing strong political will for preventing and combating corruption, and commitment to transparency and accountability as means of restoring trust in institutions, Christodoulides said Cyprus is strengthening its credibility internationally, as evidenced by recent reports from GRECO and the European Union on the Rule of Law.
Following promoted reforms in the Legal Service and Audit Office, and the strengthening of the Independent Anti-Corruption Authority, the executive will proceed this year with upgrading the Internal Audit Service.
“Our goal is the creation of a strong prevention system that will strengthen lines of defence, thus ensuring proper risk management in public administration,” he said.
Within 2026, the government is proceeding with the creation of a National Mechanism for Screening Foreign Direct Investment, aimed at further enhancing transparency and national security.
Water security and climate crisis
As the country is in one of the most climatically vulnerable regions of the planet, addressing the increasingly severe impacts of the climate crisis – such as drought and fires – relates to the country’s security.
Construction of the Solea-Marathasa heliport is being completed, substantially enhancing capabilities in aerial firefighting, search and rescue. Simultaneously, the early warning system is being implemented, with the goal of full operation within 2026. Civil protection is also a priority of the Cypriot Presidency, with promotion of discussions on the relevant European mechanism and the creation, as Commission President Ursula von der Leyen has announced, of a regional firefighting centre in Cyprus.
Within the framework of the Cypriot EU Presidency, a strategy for water resilience is being promoted, contributing to preparation of the new European Climate Change Adaptation Plan and addressing increasing pressures due to water scarcity.
Over the past two years, more than €200m has been invested in water infrastructure. In 2026, three additional mobile desalination units are being installed, enhancing the water balance by 50,000 cubic metres of water daily. Simultaneously, all necessary studies are being conducted with the aim of constructing additional permanent desalination works. Christodoulides thanked the UAE President for substantial assistance, expressing hope for further announcements soon.
Water consumption in Cyprus is among the highest in Europe, with some areas exceeding 500 litres per person daily, he noted, adding that personal responsibility in safeguarding this precious resource is of vital importance.
Education and social welfare
A bill on special education will be submitted this year, following relevant consultation, so that schools become more inclusive and offer better services based on the needs of all children.
Key measures include cultivating modern skills such as proper management of artificial intelligence and development of critical thinking through further updating of curricula, continuation of upgrading technical and vocational education with expansion of the technical gymnasium beyond Nicosia and Limassol to Paphos and free Famagusta, creation of 60 more voluntary all-day schools in primary education, and piloting free breakfast provision in kindergartens in Larnaca and free Famagusta districts.
The president announced implementation of a pilot programme introducing social workers to primary and secondary schools, through cooperation between educational psychologists and social workers, to contribute substantially to reducing violence and delinquency and cultivating psychological resilience in children.
In culture, €15m is allocated in 2026, increased by 20 per cent, for supporting cultural bodies and creators. An additional €4.5m is earmarked for the cultural programme of the Cypriot EU Presidency, effectively marking the beginning of implementation of the cultural diplomacy strategy.
In sport, investment continues in projects leaving a positive imprint on the country’s future, with particular emphasis on athletes and sporting infrastructure. Completion of the Spyros Kyprianou Sports Centre, a project worth more than €15m, alongside planning that has begun for other infrastructure across the country, constitutes tangible proof of government investment in sport. The president also referenced the decision to support athletes with disabilities without any discrimination compared to other athletes.
Healthcare receives €145m upgrade
In health, the president referenced a development programme worth €145m for substantial improvement of public hospitals in all provinces. Within 2026, significant projects will be completed including renovation and expansion of the A&E department and creation of a new neurology clinic in Nicosia, improvement works at Limassol Hospital together with new intensive care and haemodialysis units, upgrading of the A&E department and radiology department at Larnaca Hospital, and creation of a pulmonology clinic in Paphos.
Within 2026, the procedure for construction of a new hospital in Polis Chrysochous will also begin to cover the needs of the wider area.
Simultaneously, establishment of the Food Safety Authority is being promoted so that the country has a unified, strong and independent control mechanism for protecting public health based on international practices. “This is a response to modern challenges threatening food safety and by extension public health,” Christodoulides said.
€300m+ investment to tackle housing crisis
The government has invested more than €300m so far on housing, demonstrating the importance it attaches to the issue. Cyprus will utilise the plan presented by the European Union, following Nicosia’s initiative.
The role of the Cyprus Land Development Corporation is being further upgraded through state funding to implement additional projects. Within 2026, the organisation is proceeding with construction of 258 new affordable housing units, in addition to 180 already in progress, whilst in cooperation with the private sector, approximately 500 new housing units are being constructed on state land, an investment of total value exceeding €75m.
Simultaneously, within 2026, housing schemes are being revised to cover more beneficiaries, whilst through urban planning incentives and the Build to Rent programme, approximately 2,000 new housing units are expected to be created within two years. At the same time, modernisation and speed of the new licensing system are increasing housing stock, with more than 5,500 families already having benefited from the new procedures.
Infrastructure projects advance
In infrastructure, promotion of major road projects continues. In 2026, construction of motorways from Evrychou to Astromeritis and from Nicosia to Palechori is being completed. Motorways from Denia to Astromeritis, Polis Chrysochous to Stroumbi with four lanes, and the second phase of the Limassol to Saittas motorway are also being tendered.
In major urban centres, work proceeds on completing the road network with the aim of decongestion. In Nicosia, the next phases of the ring road are being implemented, whilst for Limassol, the first phase of the northern bypass is being tendered.
Social support
The upward trajectory of the economy allows the government to further strengthen social policy, substantially supporting citizens at every stage of their lives – from first steps to old age, the President said. Social expenditure increased by six per cent in 2026, following a corresponding increase in 2025.
For new families, the Together with Baby and Mother scheme is being launched, with a budget of €4m, combining material support with home social worker services for families with newborns.
For students, the student grant is being modernised, increasing the budget to €62m, expanding beneficiaries and abolishing income and property criteria for families with five or more dependent children.
For the elderly, the home care institution is being upgraded with a budget of €3m, complementing successful strengthening of institutional care.
Regarding citizens with disabilities, the president reaffirmed the decision for substantial support through prepared legislation. New regulations provide access to social services such as personal assistants, increase benefits, and make citizens who currently do not receive any help due to income or property criteria eligible.
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