Cyprus’ Automatic Cost of Living Allowance (ATA) dispute flared overnight after the Employers and Industrialists Federation (OEB) unanimously rejected the outline proposal tabled by the Finance and Labour Ministers to de-escalate the row. The decision, which leaked to TV channels before any OEB press release, triggered disappointment at the Presidency and surprise from union leaders, who argued the social dialogue with ministers and the trade union movement had not yet concluded.

Senior OEB figures and Director-General Michalis Antoniou declined detailed comment on the decision, while the Cyprus Chamber of Commerce and Industry (CCCI) convenes today to assess the same ministerial framework. The move to bypass the informal joint OEB–CCCI executive forum on ATA raised questions, given CCCI was due to decide today.

After their joint meeting with the ministers, both employer bodies spoke of “convergences and divergences” but avoided specifics. Antoniou described the process as “fluid” and a “roller-coaster of emotions,” acknowledging setbacks and stressing that the dialogue is stuck on multiple issues, including the universal extension of ATA. CCCI DG Philokypros Rousounides added that while a solution may seem “as close as it is far,” it must be comprehensive, not à la carte.

According to information discussed in the meeting, the ministers did not formally table a draft agreement. Instead, they sought feedback on elements circulated last week and floated parallel ideas to widen common ground:

• A 4% “cap/cut-off” on ATA increases during high inflation periods.

• Maintaining the Zeta Emilianidou formula, linking ATA payout to economic growth.

• Potential tax relief for businesses to offset ATA-related additional costs.

• A gradual restoration of ATA to 100% over 18 months.

It remains unclear whether mediators raised union calls to embed ATA into the National Minimum Wage.

OEB’s executive, after a teleconference debrief, issued terms of reference for its negotiating team on ATA. CCCI’s bodies are being briefed today, with Rousounides saying the joint OEB–CCCI course on ATA “will continue to the end.” The ministers meet SEK, PEO, PASYDY and DEOK at 14:00.

Antoniou told CNA he “cannot deny” reports of OEB’s rejection—“it would be misleading”—but said OEB will wait for CCCI’s decision and the outcome of the ministers–unions meeting before formalising its stance. He underscored the need for coordination, proper timing and respect for institutional processes within Cyprus’ industrial relations system. The endgame, he warned, could still be either an impasse or an extension to accommodate red lines on both sides: “A settlement only works if neither side feels defeated.”