A return to pre-COVID levels for State aid across the EU-27, accompanied by the gradual withdrawal of emergency measures, is highlighted in a European Commission report published on Wednesday.
In 2024, EU-27 Member States spent a total of EUR 168.23 billion on State aid, corresponding to 0.94% of EU GDP. Approximately 90% of this amount was directed towards the Union’s strategic policy priorities, while only 10% was allocated to crisis-related measures linked to COVID-19 and the war in Ukraine.
Bucking the trend
Cyprus, although remaining a small player in absolute terms due to the size of its economy, follows a contrasting trend, increasing State aid as a share of GDP and placing particular emphasis on the agricultural sector. The Commission’s report shows that Cyprus’ State aid policy in 2024 does not merely move passively within the European current, but reflects specific national priorities and development needs, differentiating the country from the EU average.
Being among the Member States with the lowest overall expenditure, Cyprus spent a total of EUR 186.35 million on State aid in 2024, corresponding to just 0.11% of total EU State aid, placing it together with Malta and Latvia at the bottom of the EU ranking in absolute terms.
However, the picture changes when expenditure is measured relative to GDP. In 2024, Cyprus recorded an increase of 0.09 percentage points, reaching around 0.56% of GDP, in contrast to the general EU trend, where most Member States reduced their spending. At the level of the EU-27, total State aid declined by 17% compared with 2023, continuing the downward adjustment after successive crisis years. Thus, while the EU overall is moving downwards, Cyprus stands out as an exception, with a modest but clear upward trend.
Sector-specific aid
At EU level, the dominant policy objectives in 2024 were environmental protection and energy savings (45% of total expenditure), followed by research, development and innovation, regional development, and, to a lesser extent, crisis recovery measures.
Only seven Member States increased State aid as a share of GDP in 2024, including Cyprus, together with Bulgaria, Romania, Belgium, Austria and Ireland. In the Union’s largest economies (Germany, France and Italy), the reductions were substantial as emergency support schemes were gradually phased out. By contrast, Cyprus appears to be targeting specific sectors more actively, reorienting its spending towards cohesion policies and agricultural development, seeking convergence with European priorities while maintaining a strong element of national specialisation.
Agricultural focus
Cyprus therefore clearly follows the general European direction in the overall allocation of State aid, since, as in the EU as a whole, most of its expenditure concerns non-crisis, structural policies aligned with the Union’s strategic objectives, such as the green transition and competitiveness.
At the same time, its resource allocation reveals a distinct national profile: around 16% of Cyprus’ total State aid in 2024 was directed to agriculture, forestry and rural development, a higher share than the EU average, reflecting the structure of the Cypriot economy and domestic development priorities. Cyprus thus does not diverge from the European framework but adapts it to its specific needs, achieving convergence with EU priorities through nationally targeted interventions.
CNA