The Cypriot Welfare State at a Time of Crisis

The present contribution presents data backing up the thesis that the welfare state in Cyprus has deteriorated significantly since 2008, placing the blame on the policies implemented by the 2008–2013 government, as well as the economic crisis and the resulting Memorandum of Understanding that was signed between Cyprus and its international lenders. Following a detailed presentation of lead-up to the signing of the MoU and of its main provisions, goals and effects on economic indicators, as well as of other measures taken to alleviate the effects of the economic crisis, it is argued that the ageing and increase of the population as a result of low fertility rates will put a further strain on the welfare state. The labour market policy and its aims are presented, whilst the situation and MoU provisions as regards pensions, health policing and the tackling of social exclusion are analysed. It is argued that the rollback of the welfare state and the switch towards targeted rather than universal policies is a risk given the lack of trust in the state and the general feeling of uncertainty. It is concluded that these latter feelings of lack of trust and the accompanying uncertainty, which are partly the effects of the economic crisis and the MoU, but also reflect structural weaknesses of Cypriot society, significantly delegitimise the welfare state in Cyprus.