After a long national discussion, an important agreement has been reached in Cyprus. It brings back the full Cost-of-Living Allowance, or COLA. This system helps protect workers' wages from inflation. The agreement was made in November between the government, employers, and worker representatives. President Nikos Christodoulides says it is a big step for economic fairness.
The government sees this as a major reform. The plan is to bring back full protection against rising prices over the next two years. They say this is good news for middle-income families who are struggling with costs.
However, the system will not help everyone. The COLA system is quite old, but it is still used in a limited way today. Experts say only about 44% of workers in Cyprus will get these automatic pay increases. This means around 227,000 people will get the allowance, but about 288,000 will not.
The way the allowance is calculated also creates a strange situation. Politicians say it helps low and middle-income workers the most, but the reality is different. In fact, high-level public servants and some union workers will see the biggest financial gains. This is because the allowance is a percentage of a person's existing salary. So, people who already earn more money get a larger amount.
Many workers are not included in the COLA system at all. This includes self-employed people, temporary staff, and many employees in small private companies. This creates two groups of workers: those with automatic protection and those without. For now, inflation is very low, so the problem is not serious. But if prices rise quickly in the future, the differences between these two groups will become much clearer.