The Cypriot government’s efforts to achieve a lasting agreement on the Automatic Cost-of-Living Allowance (ATA) hit another stumbling block this week, as meetings between employers, trade unions, and ministers failed to produce a breakthrough.

Despite high expectations surrounding the new ATA framework drafted by Finance Minister Makis Keravnos and Labour Minister Yiannis Panayiotou, both sides left the talks without concrete progress. The proposal, aimed at establishing a balanced and sustainable formula for the universal application of the ATA, drew strong scepticism from employer organisations and only measured optimism from unions.

According to Brief, sources close to the talks described a “heavy atmosphere” in the morning meeting between the ministers and employer associations OEB and CCCI. Business leaders expressed deep disappointment, saying the government’s revised plan was neither realistic nor financially viable for the private sector.

Employers criticised the framework for lacking safeguards, providing no state contribution to offset labour costs, and ignoring their “core preconditions” regarding competitiveness and public finance sustainability.

Although they refrained from public statements due to a mutual moratorium on comments, insiders say the employer front remains unconvinced by the government’s “ATA for all” approach, despite hints of future discussions.

In contrast, trade unions (PEO, SEK, DEOK, and PASYDY) adopted a low-key stance, avoiding escalation while reiterating their demand for full ATA restoration.

Union sources said that while the process remains “useful and productive,” there is no substantial progress yet. They stressed that any deviation from full restoration would be unacceptable without clear guarantees protecting workers’ purchasing power.

The pan-union conference held last week had already authorised union negotiators to engage in talks, but the outcome so far has left expectations muted.

In an official statement, the Ministry of Labour described the latest marathon of meetings as “useful and productive,” noting that talks will continue in the coming days.