The preliminary agreement on the Cost-of-Living Allowance (CoLA) was signed at noon in the presence of the President of the Republic, Nikos Christodoulides.
In statements made during a special ceremony at the Presidential Palace, Christodoulides stressed, among other things, that “a permanent agreement on CoLA is being achieved”.
He added: “A matter that had remained open for more than 15 years, a consequence of the fiscal crisis that tested the country, is being definitively resolved today, with respect for the institutions of social dialogue and with a positive outlook for the future of the economy and workers,” he added.
Today, he continued, “an important task is being completed and, through responsible and constructive dialogue, a permanent agreement on the Cost-of-Living Adjustment is being achieved”.
"We received a CoLA at 50%, and today we are achieving the full restoration of CoLA to 100% in the space of 18 months. With this framework, more than 55,000 new beneficiaries are included,” the President highlighted.
“To reach the agreement, convergences and compromises were required between the two sides,” President Christodoulides remarked.
Breaking down the final CoLA agreement framework
Outlining the final framework of the agreement, PASYDY Secretary-General Stratis Matthaiou told CNA that CoLA will be granted at 80% on 1 January 2026, at 90% on 1 July 2026, and at 100% on 1 July 2027.
From then on, CoLA will be paid at 100% every July. Its implementation will now take into account the average growth rate of the previous year, which must be positive.
For the implementation of CoLA, the average growth rate of the previous year will now be taken into account, and it must be positive.
Additionally, a ceiling will be set for CoLA payments corresponding to inflation of up to 4%. If inflation exceeds 4%, CoLA will only be paid up to that 4% level.
It is also foreseen that an expanded session will convene within the framework of the Labour Advisory Body, which will issue recommendations whenever there is an economic crisis.
On the issue of the minimum wage, Mr. Matthaiou said that the national minimum wage will be linked to CoLA through the incorporation of an amount corresponding to the applicable cost-of-living allowance of the previous two years. The issue of implementing the minimum wage will be revisited in 2028, he said.
For his part, the Director General of the Employers and Industrialists Federation (OEB), Michalis Antoniou, said that they have not yet seen the final texts of the agreement, noting, however, that based on what he has been told, the substance remains unchanged following the unions’ meeting with the President.
Specifically, the framework agreed by the employers’ organisations remains in place, according to which CoLA coverage for the minimum wage will be applied every two years, and the section concerning incentives for employers to expand the institution has been reworded, he said.
