The truncated implementation of the green transition milestone, included in the Cypriot Recovery Plan, will remove €28 million. from the total funding that the Republic will receive from Brussels. Specifically, instead of €1.02 billion. corresponding to the country, in the end the total amount to be disbursed will be €992 million.
As "F" is informed, for the milestone of the green transition, if the country implemented the initial three prerequisites, which concerned water fees, a green fuel tax as well as waste landfill fees, it would receive a total amount of €69 million. Of these, only the imposition of water fees was implemented, and last June the Cypriot authorities amended the milestone, increasing the prerequisites to five, to limit the loss of European funds.
The European Commission has welcomed the inclusion in the green transition milestone of the two measures adopted as part of the tax reform concerning green tax incentives for individuals and businesses. They concerned, in particular, the granting of tax deductions for the purchase of an electric vehicle and the installation of photovoltaics. Therefore, Cyprus will receive 3/5 of the total fund, which corresponds to €41 million, from this milestone.
It is recalled that the green tax, known as the carbon tax (on motor fuels), was not implemented after a decision of the Council of Ministers, as part of the measures to deal with high prices. The bill on landfill fees was recently rejected by the Parliament.
Cyprus caught up with the milestones
This year the Recovery Plan is being completed and by August 31 all EU member states will have to implement all the prerequisites to which they have committed. Of the 221 prerequisites included in the Cyprus plan, Cyprus has completed 220 and partially the one that remains behind, which concerns the green transition.
It is worth noting that in the original plan, the Republic had 282 milestones, which were simplified and unified along the way, with the consent of the European Commission. Following the amendment of the Cyprus plan, the number of disbursements was reduced from ten to nine.
To date, the Republic of Cyprus has disbursed, out of a total amount of €1.02 billion, funds amounting to €589 million, which concern the six tranches of the plan. In the meantime, a few days ago, the EU positively assessed the request of the Cypriot authorities and the collection of the 7th instalment, amounting to €187 million, is expected shortly. Therefore, the total amount will reach €776 million, which essentially corresponds to 70% of the total European funds. The remaining 30% of the money, corresponding to €216 million, concerns the 8th and 9th instalments.
In September, according to information from "F", the Republic of Cyprus will submit to Brussels the last request for the disbursement of the 8th and 9th tranches, which will include a total of 85 milestones. As we are informed, the 84 milestones are fully completed, while another prerequisite will be submitted, which concerns the green transition, was included in the 6th instalment last March and has been partially satisfied. At the time, Brussels had suspended an amount of €46 million which concerned the green transition, which Cyprus will eventually receive as a reduced amount.
Optimism that the plan will be successfully completed
A senior source, speaking to "F", expressed her optimism that all the prerequisites to which the Cypriot authorities have committed will be implemented. As he said, the country will win the bet and will collect the funds from the Recovery Fund.
He also mentioned that there was a coordinated mobilization and cooperation of all stakeholders and the Parliament for the passage of the legislation. As he explained, the Plan will be successfully completed in 2026, leaving behind a strong and sustainable growth footprint for the Cypriot economy.
Projects and reforms
It is recalled that the main purpose of the Recovery Fund was to financially support EU member states to deal with the consequences of the coronavirus pandemic, to promote the green and digital transition, as well as to strengthen the resilience of economies.
Through the Recovery Fund, Cyprus has adopted a series of reforms in the fields of education, health, labour, energy and the environment. Major infrastructure projects with a total budget of €600 million were also completed, while a decisive boost to the economy was given through the 40 grant schemes, of around €400 million.
