The European Union is calling on Cyprus to improve the governance of semi-governmental organisations and state-owned enterprises, focusing on merit-based board appointments, a clear state ownership policy and performance-based management.
The recommendation is part of the European Semester and covers organisations operating in key sectors such as electricity, telecommunications, water supply, wastewater management and infrastructure.
The EU identifies weaknesses in accountability, transparency and appointment procedures, as well as the absence of a clear state ownership policy.
It acknowledges steps towards more merit-based appointments through the Advisory Council but says further improvements are needed. The EU also says effective implementation of the recently adopted action plan for state-owned enterprise governance could help address these issues and improve performance.
The International Monetary Fund made similar recommendations after providing technical assistance to Cyprus in 2023. These included more formal, independent and transparent selection procedures, assessing candidates based on their qualifications and each organisation’s needs, a central oversight mechanism, a state ownership policy and performance-based management systems.
The EU recommendation indicates that the issue extends beyond board appointments to the broader governance framework for state-owned enterprises.
Source: Politis
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