Cyprus to turn Social Insurance Fund into €60bn investment vehicle

Cyprus’ government announced the end of a decades‑long practice of borrowing from the Social Insurance Fund (SIF). Labour Minister Marinos Moushouttas said the state will start repaying the roughly €12 billion debt next year in annual instalments of about €100‑120 million, equivalent to about 3 per thousand of GDP.

Annual surpluses of around €800 million will be redirected into a new special‑purpose vehicle, modelled on a sovereign‑wealth fund, to build a reserve of €50‑60 billion by the late 2020s. An independent management entity, expected by the end of 2027, will oversee investments in line with European standards. The fund is intended to safeguard the long‑term viability of the SIF and support upcoming pension reforms, with legislation to be tabled before the July recess.