Filenews 22 October 2025 - by Eleftheria Paizanou
The beaten track of 2025 will be followed for 2026 by the 20 municipalities, which will share a state grant of €117 million. Sponsorship which is increased by €45 million. from the one they received before the implementation of the Local Government reform that came into effect on July 1, 2024.
The amount of the state subsidy is determined on the basis of population, area, residential density, as well as other criteria.
In detail, the €117 million. will be distributed as follows:
– Nicosia €22.55 million
– Limassol €17.03 million
– Larnaca €10.09 million
– Strovolos €9.28 million
– Paphos €6.65 million
– Lakatamia €6.35 million
– Amathus €5.21 million.
– Paralimni-Deryneia €4.94 million.
– Latsia – Geri €4.36 million.
– Municipality of Kourion €4.33 million
– Aradippou €3.85 million.
– Ayia Napa €3.74 million
– South Nicosia-Dalio €3.63 million
– Polemidia €3.44 million.
– Sanctuaries €2.33 million.
– Akamas €2.21 million.
– Dromoloxia-Meneou €2.21 mil.
– Polis Chrysochous €1.97 million.
– Lefkara €1.36 mil.
– Athienou €1.36 million.
Prudence and rationality
According to a circular from the Ministry of Finance, municipalities will have to advance their budgets for 2026 by the end of the month. They are called upon to prepare their budgets wisely, rationally and at the same time to prioritize.
At the same time, it is pointed out that expenditures should be within their financial capabilities, reflecting the strategic directions of the Government and ensuring that the measures and actions will have the greatest possible added value and will be in line with the strategic objectives of the Government.
At the same time, the Ministry of Finance points out that municipalities should prepare their budgets on a single basis and with a three-year horizon, taking into account the distribution of the state grant of €117 million. "The current geopolitical situation has greatly increased economic uncertainty internationally and the outcome of these developments is an important parameter for economic developments in the coming years. In view of the great uncertainty that prevails for the preparation of the budget of the municipalities, both the cash reserves and the ability to collect the revenues should be taken into account," the circular adds.
In addition, the municipalities are required to regulate so that their budgets are governed by the principle of a balanced budget, i.e. the budgeted revenues from the operation of the municipality, including state sponsorship and other sponsorships that will cover all the budgeted expenses for its operation. In addition, it is pointed out that the cash flow should have a positive or zero balance to ensure short-term liquidity, i.e. the Municipality should be able to meet its obligations immediately, including the repayments of its loans.
Revenues – expenses and mature projects
According to the circular, estimates for revenues should be realistic and take into account the current economic situation, the estimates for the course of the economy. But also the collection capacity of each municipality.
Expenses must be calculated rationally, accurately and consistently, within the financial capabilities of each municipality.
In relation to development projects, municipalities are invited to include only those projects that are deemed necessary and mature, with priority being financed by European funds and provided that there are liquid resources for their implementation. In their budgets, municipalities should record the commitments and obligations they have undertaken, e.g. payments, etc.
Sustainability-driven
In relation to personnel issues, budgets should indicate the amount of salary expenditure as a percentage of the total expenditure of the municipality. As pointed out in the circular, employment policy aims to ensure the sustainability of public finances and to achieve an efficient and effective wider public sector, through the further development of human resources.
Also, the employment of retired persons in the municipalities is prohibited, with the exception of those who hold a state office and those who are with a service contract on the basis of public contracts. Finally, municipalities are called upon to strictly adhere to the schedules and submit their budgets to the Ministries of Finance and Interior on time, so that they have time to examine them before the end of the year and to avoid the use of twelfths.
