Finance Minister Makis Keravnos has refused to back down from his decision to freeze €25 million in payments to Greek grid operator IPTO, deepening a diplomatic crisis that threatens to derail the strategic electricity interconnection project.
In an exclusive interview with Phileleftheros, Keravnos made clear he will not approve the funding release until IPTO fulfils outstanding commitments, despite mounting pressure from Athens and public backing from President Nikos Christodoulides.
The escalating row has prompted three senior Greek government officials to demand Cyprus clarify its position, with the dispute set to be discussed at today’s informal EU Energy Ministers Council.
Keravnos lists IPTO failures
When asked directly whether he would approve the €25 million payment, Keravnos was unequivocal: “I think I was clear” – indicating a firm rejection.
The finance minister cited multiple failures by IPTO to meet agreed commitments, including construction schedules, bathymetric surveys, and other project milestones outlined in the understanding framework between the two governments.
“The government recognises this project has geopolitical value,” Keravnos acknowledged. “But IPTO has not completed everything agreed in the understanding framework – whether timetables, project construction, or bathymetric surveys. Therefore, there is project delay and money cannot be released when issues that should have been initiated by IPTO remain unimplemented.”
The minister’s position directly contradicts IPTO’s claims that the project remains on track, with cable construction proceeding at Nexans factories and the 2030 delivery deadline unaffected by survey delays.
Presidential backing sparks Athens fury
President Christodoulides’ full support for his finance minister yesterday evening has further inflamed Greek officials, who had hoped Nicosia would reverse course following their public criticism.
The President maintained Cyprus has a “unified position” whilst insisting IPTO must honour its commitments, though he declined to specify which obligations remain outstanding.
Three senior Greek government figures responded with barely concealed anger, demanding clarity from Cyprus whilst reaffirming their own commitment to the project.
Greek Deputy Prime Minister Kostis Hatzidakis emphasised the cable’s European priority status, noting Cyprus would be the primary beneficiary through ending its energy isolation.
“Greece’s commitment is concrete and demonstrated through various actions by ministries and public bodies, but it remains to be clarified what Cyprus wants to do,” Hatzidakis stated.
Greek taxpayers warning
Government spokesperson Pavlos Marinakis delivered a warning about cost-sharing, telling Open TV: “There is no possibility that Greek taxpayers will shoulder the entire fiscal cost.”
Energy Minister Stavros Papastavrou described Keravnos’s statements as sending “an ambiguous message and creating question marks,” whilst confirming the dispute will be raised at today’s EU Energy Ministers Council.
The Greek energy ministry will be represented by Deputy Minister Nikos Tsafos, whilst Cyprus will send Energy Ministry Director-General Marios Panagidis.
IPTO awaits payment approval
Despite the political standoff, IPTO maintains the project proceeds normally, with regulatory authority CERA (Cyprus Energy Regulatory Authority) having already approved the €25 million as justified recoverable expenses for 2025.
However, the September 2024 understanding framework between both governments contains no specific preconditions for the annual payments, which are due to continue until 2029.
The Greek operator argues that Turkish objections and threats preventing maritime surveys in international waters should not affect the agreed payment schedule, particularly as cable construction continues uninterrupted.
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