The Ministries of Finance and the Interior have reached an agreement regarding the revision of the annual state subsidy provided to municipalities.

In addition to the state subsidy of 117 million euros, a grant of 15 million for the maintenance of primary roads and a grant of 12 million to compensate for lost revenue from licensing fees. This brings the total subsidy amount to 144 million euros.

“The government had acknowledged that the state subsidy should not be a fixed amount, and for this reason we have recently been engaged in intensive discussions with both the Union of Municipalities and the Ministry ofFinance Ministry to find an appropriate formula that would take into account both inflation and other increased operating costs faced by municipalities, in order to make the state subsidy more equitable.” ^{Margarita Kyriakou, Spokesperson for the Ministry of Foreign Affairs}

Starting in 2027, the amount of 144 million euros will be revised and will correspond to 50% of the increase in the government’s net primary expenditures.

“Since this has been set at 5.4% for 2027, the increase in state subsidies for municipalities will be 2.7%, meaning the 144 million will rise to 148 million. In addition, the Ministry of the Interior is expected to contribute over 240 million for the period from 2024 to 2029 to carry out urban planning projects in municipalities aimed atinfrastructure and development projects.” ^{Margarita Kyriakou, Press Officer, Ministry of Foreign Affairs}

The proposal sent to the Union of Municipalities includes a recommendation to review the increase every three years.