Cyprus pushes for energy fiscal relief at EU meetings

Cypriot Finance Minister Makis Keravnos is attending the Eurogroup and ECOFIN meetings in Luxembourg on October 8 and 9, 2026, to advocate for greater fiscal flexibility amid the ongoing energy crisis. The minister is spearheading an effort, supported by several other EU member states, to allow governments more leeway within the EU economic governance framework to better protect households and businesses from rising costs.

A key component of the Cypriot proposal involves securing a derogation for the excise duty on heating oil. Following a domestic government decision to reduce this duty from 7.4 cents to 2.1 cents per litre for the period between November 1, 2026, and April 30, 2027, Nicosia is now seeking further EU-level exemptions. Furthermore, Keravnos has initiated a formal process with the European Commission to reform the calculation of VAT on electricity bills, which he characterizes as an unfair form of double taxation.

These discussions occur against the backdrop of negotiations for the 2028–2034 EU budget and broader concerns regarding geopolitical instability. While the Commission has previously shown hesitation toward some requested exemptions, Cyprus is leveraging its recent improvements in public finances and debt reduction to argue that fiscal rules must adapt to the economic realities facing European citizens.