Alpha News

Organic Link Between Foreign Businesses and Cypriot Economy Crucial, Fiscal Council President Says

Published January 12, 2026, 15:28

The President of the Fiscal Council of Cyprus, Michalis Persianis, emphasized to the Parliamentary Committee on Finance the critical importance of the organic link between foreign businesses and the Cypriot economy and society. According to Mr. Persianis, this is necessary to ensure that the benefits of investment remain in Cyprus and to reduce the risk of capital outflow. Mr. Persianis stated that growth and exports in Cyprus are largely driven by foreign high-tech companies, while wage increases are not proportional to economic growth, resulting in income inequality. He also pointed out that the increase in foreign direct investment has not been accompanied by strategic management to encourage linkage with the local economy. He proposed adopting a model similar to that of Ireland, where foreign companies are encouraged to integrate into the domestic economy. This would reduce the ease with which they can leave Cyprus, thus protecting investments and creating sustainable growth. In another point, Mr. Persianis referred to the increase in the state's debt to the Social Insurance Fund, noting that this phenomenon has existed since the establishment of the Fund, with an annual increase rate of approximately €1 billion.