The Ministry of the Interior and the Union of Municipalities have reached a compromise regarding state subsidies to municipalities.
According to an announcement by the Union of Municipalities, the proposed bill includes the key positions put forward by the Union during the intensive consultations that preceded it.
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“Specifically, the bill provides for the replacement of the existing fixed amount of €117 million with a fixed percentage of 1.52% of the upper limits of the Republic’s net primary expenditures, as included in the state budget for the respective year,” as the Union adds.
Meanwhile, the statement continues, according to the bill, “net primary expenditures” are defined as the Republic’s primary expenditures, excluding loan repayments, interest, and investments, as well as defense spending and the Republic’s contribution to the European Union budget. At the same time, provision is made for the allocation of additional funds to provide financial support to municipalities when there are serious and duly justified reasons.
The Union of Municipalities expresses its satisfaction with the agreement, emphasizing that this development represents a significant outcome of the consultations held in recent months and responds to the long-standingof the Union of Municipalities for a stable, institutionalized, and predictable framework for the financing of local government. A framework that will no longer be confined to a fixed nominal amount but will be directly linked to the state’s actual fiscal figures, thereby safeguarding the sustainability of the municipalities.
Ministry of the Interior: The agreement demonstrates the government’s political will
The agreement with the Union of Cyprus Municipalities regarding the method for calculating the state subsidy demonstrates once again the government’s political will to actively support local government, says Interior Minister Konstantinos Ioannou.
In a post on X, Mr. Ioannou states that the agreement “we reached today with the Union of Cyprus Municipalities regarding the method for calculating the state subsidy demonstrates once again the Government’s political will to actively support local government.”
“Through responsible and constructive dialogue, we listen to the positions and needs of local government bodies and work together to develop the best possible solutions, always within the limits of the state’s financial capabilities,” he states.
Local government reform, he notes, “requires consultation.” “We will continue to follow this path, with responsibility and sound reasoning, for the benefit of the municipalities and citizens, steering clear of unnecessary confrontations and empty rhetoric,” he adds, and thanks the President and members of the Union of Municipalities for their constructive stance and willingness to cooperate.
