Newsroom
Cyprus is bracing for fresh labor tensions as the government pushes ahead with plans to extend the Automatic Cost of Living Allowance (ATA) to all workers, a pre-election pledge by President Nikos Christodoulides.
According to Kathimerini's Dorita Yiannakou, the scheme, which adjusts wages to match inflation, is currently limited to certain sectors under a transitional deal that expired in June. The government now wants to legislate a universal version of the ATA with a sliding scale based on earnings, giving lower- and middle-income workers bigger boosts.
Trade unions welcome the idea of broader coverage but reject the government’s plan for a graduated system, saying it undermines equality and the core purpose of protecting purchasing power. They are also angry that the government may push the bill through Parliament without proper social dialogue, warning they are ready to escalate strike action if their concerns are ignored.
On the other side, employer groups OEB and KEBE are furious, warning that the plan will drive up labor costs, worsen inflation, and hurt competitiveness, all without a proper economic impact study. They flatly refuse to return to negotiations while the universal ATA proposal is on the table.
Caught in the middle, Labor Minister Yiannis Panayiotou has so far failed to bridge the gap. Employers accuse the president of caving to union pressure, while unions insist the government must fully restore the ATA instead of tinkering with it.
The standoff leaves Cyprus facing months of uncertainty. A new comprehensive agreement on ATA is expected to kick in by January 2026, but until then, both sides remain entrenched, and the government risks fighting on two fronts at once.
