Cyprus Union of Municipalities rejects government funding proposal

The Union of Municipalities in Cyprus has rejected the latest funding proposal from the government, maintaining its decision to proceed with labor mobilizations scheduled for Monday. Despite an eleventh-hour attempt by Minister of Interior Constantinos Ioannou to resolve the dispute, local authorities argue that the state’s offer remains insufficient to offset the economic impact of inflation.

Under the rejected proposal, the total state grant for 2027 would have increased to approximately €156 million, up from the previously discussed €148 million. This package included an €8 million increase tied to primary expenditure growth, along with €12 million for licensing revenue losses and €15 million for road network maintenance. The government also agreed to revise the calculation formula starting in 2024 rather than 2027. However, the Union of Municipalities demands an additional €11.5 million in funding, asserting that the current government offer fails to meet the actual financial requirements of the municipalities.

While the Union acknowledged the government's efforts to bridge the gap, negotiations have stalled. The planned industrial action is set to proceed as the two parties remain unable to reach a compromise regarding the necessary budgetary adjustments.