Cyprus Tiptoes Out of Lockdown

As the island-nation beats new coronavirus cases down to single digits, the government eyes a gradual easement out of quarantine

According to the Singapore University of Technology data-driven innovation lab – which makes predictions as to the estimated end of the Covid-19 outbreak for countries around the world – Cyprus may successfully vanquish the virus in the next few weeks. Calculations made in late April estimated a 99 per cent probability that the nation would curb the outbreak as early as May 8, and put the odds of an end by May 25 at 100 per cent.

But even odds that good are not a guarantee. “Over-optimism based on some predicted end dates is dangerous because it may loosen our disciplines and controls and cause the turnaround of the virus and infection. Although prediction based on science and data is aimed to be objective, it is uncertain by nature,” warned the lab.

The daily number of new coronavirus cases remains low. “These numbers seem to have been stabilising for a few days now at quite low levels and we want them to stay that way so that we can move forward with more certainty,” Health Minister Constantinos Ioannou said. This is good news for the island, which has seen its economy suffer due to the lockdown enacted in an effort to mitigate the spread of the virus. To date, Cyprus has logged 883 confirmed cases and 15 fatalities – significantly less than other EU nations – thanks to citizens’ rapid embrace of relative isolation stemming from the government-imposed quarantine.

Even so, determining how to safely exit lockdown puts Cyprus in uncharted waters, much like every other nation struggling to control the pandemic. To ensure the island does not see a resurgence of the virus, Ioannou believes “we must remain committed and disciplined,” adding that Cyprus must undertake regular testing while taking careful steps towards re-opening. “It is too early to say that we are or feel safe.”

Dr. Marios Loizou of the Cyprus State Health Services Organisation OKYPY said “For months now, we have all been at war with an invisible enemy. We stayed away from our own people; we changed our lifestyle. We were deprived of a lot. But we stayed healthy, we protected the vulnerable groups, we saved as many lives as we could.”

Exiting Two Months of Lockdown

The national shutdown has taken a toll on the Cypriot economy. Unemployment rates rose to 6.7 per cent in March, up from 5.8 per cent in February. According to a Eurostat report, the euro-area’s rate of seasonally-adjusted unemployment also went up to 7.4 per cent due to the COVID-19 lockdowns, meaning that more than 14 million people are unemployed in Europe. It’s a dire situation entailing struggles EU nations have not experienced since WWII, while exceeding the difficulties faced by Southern European countries during the sovereign debt crisis a decade ago.

Government ministers have laid out an exit plan, running from May to mid-July, and hope to kick start Cyprus’s economic recovery. This strategy will be implemented in four stages, each lasting 17 days long. Construction sites, open-air markets, and retail shops have already begun operating, but restrictions on free movement – including travel from town to town, social visits, and religious gatherings larger than ten people – won’t end until May 21. This is also the date when open-air cafes and restaurants can serve customers again. Gyms and airports are not due to reopen until June 9, and only under strict guidelines. Schools will not resume classes this year except for those in their final year of studies. The final stage of the country’s lockdown exit – set for July 14 – will allow for theatres to reopen, as well as the resumption of festivals and concerts. Progression to each stage of the plan is contingent on the success of each milestone, with both citizens and businesses taking appropriate measures to avoid a sudden resurgence of COVID-19 cases.

The government is requiring companies to enforce the distancing rule of one worker per eight square metres, and provide staff with hand sanitiser and clean surfaces. Employees who have contact with the public, whether in the public or private sector, must wear face masks. Work from home will still be encouraged, especially for individuals considered vulnerable or high-risk. The general public are encouraged to wear masks, but it will not be a mandatory practice for visiting shops or receiving public services.

Cyprus’s economy has been severely impacted by the lockdown, with unemployment rates rising to 6.7 per cent. But Finance Minister Constantinos Petrides is hopeful for strong economic recovery by this year’s fourth quarter if citizens remain disciplined and continue to adhere to measures. “We are taking a step forward but if we don’t observe the rules of this second, difficult phase, then we could take two steps back. Two steps back would be catastrophic for both for our health and the economy,” says Petrides. Copyright: Alexandros Michailidis /

Restarting the Economy

The island nation’s staged reopening is the riskiest part of their overall response to the pandemic, as it gives the virus an avenue to potentially spread rapidly. However, keeping the economy on pause would cause its own series of calamities.

Finance Minister Constantinos Petrides warned citizens not to be complacent. “If there is compliance in this second, more dangerous phase, that needs increased discipline we perhaps need to be more vigilant, then the economy may recover in the fourth quarter and will peak in 2021.” Petrides is hopeful that the economy could show a strong recovery by the fourth quarter of 2020. “The aim is to move to recovery because without the economy there cannot be a health system,” the finance minister told a televised media conference in late April.

“We are taking a step forward but if we don’t observe the rules of this second, difficult phase, then we could take two steps back. Two steps back would be catastrophic both for our health and the economy,” Petrides said.

Cyprus’ retail sector alone contributes over 1 billion euros to the economy. From that revenue, more than 12 per cent goes to the state and keeps more than 9 per cent of the working population employed. Construction accounts for 7.5 per cent of the total workforce and 5 per cent of the overall economy, while contributing to 16 per cent of state revenues. Both industries are critical for Cyprus’s overall economic health, which is why they are part of the first phase of the gradual rollback of confinement measures. “The choice of businesses to open first was made based on their sector’s contribution to the country’s GDP, taking into consideration the number of people employed and the risk of transmission,” Petrides said.

Petrides did not say whether government plans included cutting public sector wages. Instead, he said that efforts are focused on boosting the economy and going from there. “We should not be financially short-sighted. We need to keep in mind that there will be a day after,” he said. “If we do not succeed in this second stage (the gradual relaxation of measures) then we enter again to uncharted waters for which no forecasts can be made.”

The economic hit to Cyprus has already been severe. A second lockdown prompted by another wave of infections would be disastrous. Petrides has warned that such a scenario would differ from the 2013 sovereign debt crisis, which was brought about by banks making bad loans. At the time, the government slashed spending and shrank the banking sector, utilising a 10 billion euro international bailout. Many bank managers were never held accountable for their role in the crisis, and many citizens also lost their savings when the government confiscated 57.5 per cent of accounts over 100,000 euros. But in this scenario, if Cyprus fails to manage the breakout or the economic recovery – especially with a floundering tourism sector – a credit downgrade could follow. Meanwhile, rising debt could bring with it increased austerity measures.

“At this stage we are not sure where we will end up. We’d like to believe that with everyone’s cooperation we will achieve this scenario,” Petrides said.

Central Bank Governor Constantinos Herodotou has said that they are keeping a close eye on the nation’s economic recovery. “We are vigilant, we are preparing our own scenarios in order to help in any way we can,” he said, adding that “Our economy’s growth depends almost entirely on the banking system and the banking system depends almost entirely on the economy.”

“We must be careful that any measures we take today, will not become the reason for any other future crisis…there is a need to be prudent and for provisions to be made so that we can manage properly the sources we have at our disposal today,” said Herodotou.

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B. Lana Guggenheim

Lana is a freelance journalist based in New York City. She has a M.Sc. in International Conflict from the London School of Economics and Political Science. She has worked as an analyst, reporter, and editor, covering extremism, culture, economics, and democracy.

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