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With the prevalence of the Omicron variant causing the worst wave so far on a global scale, Cyprus welcomes the new year expecting the submission of new restrictive measures. Much will depend on the outcome of the epidemiological situation for the rest of the year, especially in the economic sector.
The Ministry of Finance's estimates so far point to economic growth of close to 4% but any deterioration of the epidemiological picture in the long term will surely bring reversals for the worse in two areas: On the one hand, the state will have less revenue as a result of the decline in GDP and on the other hand, public finances will come under pressure due to increased spending to support businesses and households. However, if the situation improves significantly and the pandemic wave starts to recede, then there are expectations of a very good year, especially in tourism, which is a pillar of the Cypriot economy.
Beyond that, a source of optimism is the support that the Cypriot economy will receive from the European Recovery and Resilience Plan, provided that reforms are completed in key sectors such as local government, justice, the civil service and elsewhere.
Presidential Decisions
In the foreground for 2022 are the processes for the 2023 presidential election. Already the time for the big showdown has started counting down as on January 10, 2022, the ruling party will have a clearer picture of the contenders for the top state office. For now, the candidacy of the party's president, Averof Neophytou is taken for granted; it remains to be seen whether there will be a runner-up. In the first month of the year there is expected to be a clarification of the DIKO candidate, while AKEL's decisions are expected shortly before spring.
The country's entry into the election track will de facto put the Cyprus issue on the sidelines, where it has been for several months. If there is no drastic development (which, however, is not foreseen), then nothing spectacular should be expected for 2022. This is because in addition to the election marathon for the new president of the Republic of Cyprus, Turkey will also enter the election trail. Presidential elections in Turkey are scheduled for the summer of 2023, but the dire economic situation in which the country finds itself predicts an early election, even in 2022. Therefore, the Cyprus issue is expected to remain... on ice until further notice.
Unpredictable Erdogan
\NThe question remains, however, what tactics Tayyip Erdogan will follow in view of his aspirations to remain in power. If he will attempt to cause an artificial crisis to rally public opinion, then further provocations on the Cyprus problem along the lines of similar moves in the EEZ or Varosha, cannot be ruled out. Nicosia is turning its attention to energy, an area in which there will be intense activity in 2022.
These days the ExxonMobil and Qatar Petroleum consortium is completing drilling to evaluate the "Glafkos" field in Block 10. The results of the drilling will determine the further plans of the two companies, US and Qatari interests, to develop the field. In the coming months the consortium is expected to start seismic measurements in Block 5 of the Cypriot EEZ. Washington has received assurances from Ankara that there will not be any interference with the ExxonMobil-Qatar Petroleum consortium's operations in blocks 10 and 5. However, it cannot be ruled out that this time Turkey will also cause problems during exploration in Block 6, which has been licensed to the ENI-TOTAL consortium of Italian and Korean interests.
In 2022, there will be announcements from Chevron, Shell and Delek on the commercial exploitation of the Aphrodite field in Block 12 of the Cypriot EEZ, a development that has already been long delayed.
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