Cyprus’ state debt to public funds has reached €12.8 billion at the start of this year, up from €11.3 billion at the beginning of last year, the ministry of labour reported to parliament on Saturday.

The debt to the social security fund alone rose from €9.4 billion in 2023, €7.3 billion in 2018, €7 billion in 2013 and €6.6 billion in 2010.

The state’s debt to the redundant staff fund stands at €998 million, compared with €792 million in 2023, €447 million in 2018, €369 million in 2013 and €342 million in 2010.

The figures were presented during a parliamentary finance committee session reviewing the 2026 budget.

Until July 31, 2010, the social security fund’s reserves were managed by the central bank and invested in government treasury bills, automatically renewed on maturity.

Management of public debt was transferred to the finance ministry in 2010, under which treasury bills are no longer automatically renewed but form part of the fund’s reserves, made available to the government as interest-bearing deposits in the general accounting office.

Lawmakers requested a repayment plan for the debt.

Labour minister Marinos Moushiouttas said the issue will be addressed through the upcoming pension reform, which will also include provisions for the fund’s investment policy and management.

The minister reassured parliament that the fund remains sustainable, citing studies projecting to 2080 that confirm its robustness unless extreme unforeseen circumstances arise.

Repayment of the debt will be gradual and aligned with reforms to ensure stability.