Nicosia, Cyprus. The Union of Cyprus Municipalities will stage a three-hour protest strike on August 3 after rejecting the government’s latest funding proposal for local government reform.
The union said the proposal was insufficient and would shift the financial burden of the reform onto residents through reduced services or higher taxes and fees.
Funding concerns
The union said the issue extended beyond municipal finances, arguing that residents should be protected from the costs of state reforms.
It warned that without adequate government support, municipalities would face difficulties maintaining services, implementing development projects and improving residents’ quality of life.
State grant comparison
The municipalities challenged the government’s assertion that state funding would double, saying the comparison was based on a €70.8 million grant that had been frozen since the financial crisis.
The union said the relevant comparison should be with the €104.8 million allocated in 2010.
It added that government revenues rose by 132 per cent between 2010 and 2024, while state grants to municipalities were expected to increase by 42 per cent by 2026.
Future funding mechanism
The union said its request for grants adjusted for inflation had been rejected.
It also criticised a proposal to link future increases to 50 per cent of growth in the state’s net primary expenditure rather than government revenues, saying this would not ensure stable long-term funding.
The union opposed reviewing funding levels every three years, citing rising costs for energy, fuel, infrastructure, services and staffing.
Reform-related costs
The union said funding for main road maintenance and compensation for municipal losses in development licensing income should not be included in the basic state grant.
It said these costs were connected to responsibilities arising from local government reform.
