The cost of insularity can reach as much as 36% of Gross Domestic Product per capita in some cases, and the EU Strategy for Islands contributes to the political recognition of this cost and the need to take it into account in European policies, said Cyprus’ Minister of Finance, Makis Keravnos, on Friday, in Nicosia.
Keravnos chaired the informal meeting of EU Ministers responsible for Cohesion Policy, that took place in the framework of the Cypriot Presidency of the Council of the European Union.
During the second session, the Ministers examined the forthcoming EU Strategy for Islands, which is expected to be announced on 26 June 2026 at a High-Level Meeting in Paphos, co-organized with the European Commission.
According to Makis Keravnos, the Ministers broadly acknowledged the challenges and particular characteristics faced by islands, such as geographic isolation, higher transport and energy costs, water scarcity, and the significant pressures arising from climate change and demographic decline.
“It was emphasized that although the EU Treaty recognizes the specific characteristics of island regions, significant gaps still exist in adequately addressing them through European policies and funding instruments,” he told a press conference.
The Minister said that the Cypriot Presidency placed particular emphasis on islands because they face permanent structural challenges related to connectivity, high transport and energy costs, and the impacts of climate change, all of which negatively affect the competitiveness of island economies.
“During the discussion, it was highlighted and noted that cohesion policy can play a decisive role by supporting targeted investments that strengthen resilience, connectivity, and equal development opportunities for island regions,” the Minister said.
According to figures cited by the Minister of Finance, the European Union has more than 4,000 inhabited islands out of approximately 27,000 islands in total, with a combined population of around 10 million people. Cyprus, Ireland, and Malta are the EU’s three island member states, with a combined population of approximately 6.8 million inhabitants.
“The cost of insularity can, in some cases, reach up to 36% of GDP per capita, due to increased transport, energy, and administrative expenses. In certain island regions, transport costs may be more than 300% higher than in comparable mainland regions, while housing prices may be 75–130% higher,” he underlined.
He added that under the 2021–2027 Cohesion Policy framework, at least €12.5 billion has been allocated for investments concerning islands in areas such as energy, transport, and connectivity.
“The usefulness of the strategy for island states is that it contributes to the political recognition of the cost of insularity and the need to take it into account in European policies and legislation. It can strengthen the possibility of targeted funding for issues such as transport, water, and connectivity. It creates a framework for more tailored policies and greater flexibility for islands in areas such as state aid, transport, and the green transition,” he said.
Responding to a question by the Cyprus News Agency on whether Cyprus could seek additional funding for projects such as the electrical interconnection project (Great Sea Interconnector-GSI) under this strategy, Makis Keravnos said that “we seek co-financing for all projects, especially for those that are very costly.”
He added that funding for the GSI had already been approved around ten years ago, “under different circumstances at the time. Today, after ten years, conditions have changed, and therefore we must await the review of the studies, as announced by the Prime Minister of Greece and the President of the Republic, because it has been recognized that there are economic and technical aspects that need to be reconsidered.”
The Minister of Finance said that the overall assessment of the meeting was very positive.
The first part of the meeting focused on the “right to stay.” Keravnos reiterated that there was broad support for ensuring that every citizen of the European Union should have the opportunity to live, work, and build a life in their own place of origin, if they choose to do so.
He added that Cohesion Policy, through investment, can help safeguard this right.
“As we approach the end of the Cypriot Presidency, I would like to reaffirm that Cohesion Policy has been one of our highest priorities. Every possible effort has been made to advance negotiations among member states, with the aim of facilitating agreement on the Regulatory Framework,” he said, emphasizing that the discussion revealed a convergence of views that maintaining a strong and effective cohesion policy framework remains crucial for the future of the EU and continues to be a key pillar of competitiveness.
