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Cyprus

No turning back on local government reform

By Constantinos Psillides

The interior ministry will complete the legislation on reform of local government within two months, said Minister Socratis Hasikos on Friday, adding that community and municipality merging would be compulsory.

Following a meeting with stakeholders, chaired by President Nicos Anastasiades, the minister clarified that local authorities earmarked for mergers, would be given a two to three-year transition period.

While the Union of Cyprus Municipalities (UCM) has strongly opposed the reform in the past, they now appear to be on board.

UCM chairman Alexis Galanos told reporters that a broad consensus was achieved during the meeting.

“The merging of services, community authorities and municipalities will result in saving money,” he said, adding that UCM had asked the president to propose a way in which local authorities could become financially independent and not rely on government subsidies.

Galanos also said that the parliamentary parties were also in agreement and that the next step would be to incorporate all proposals made by UMC and the parties into the proposed bill.

Enacting local government reform was also demanded by the troika of international lenders. The troika send an ultimatum to the minister earlier in the month, saying that the legislation should be in place in two months.

This is the second draft bill prepared by the government. The first was scrapped after it was roundly rejected by all stakeholders in October, forcing the interior ministry back to the drawing board.

Main opposition party AKEL in particular had at the time criticised the government for going it alone without consulting anyone.

The first bill’s philosophy revolved around achieving economies of scale via the clustering of services provided by the dozens of municipalities. But the municipalities as well as the parties – including ruling DISY – had said the methods proposed would end up raising the cost of local government instead of lowering it – the overriding objective.

With the advice of foreign experts, the first blueprint provided for the creation of second-tier bodies of local government, taking powers away from municipalities and giving them to the new bodies – one for each of the five main districts.

There are currently 39 municipalities – nine representing towns in the north – and over 200 local council bodies.

It also provided for fewer staff – between 15 per cent and 20 per cent – with excess personnel taking early retirement or opting for transfer to other government departments. Salaries account for more than 50 per cent of municipalities’ operating expenses. In some cases in reaches 75 per cent.

Commenting on the dire financial conditions municipalities now find themselves in, Hasikos said: “This is a huge issue because they are hundreds of millions in debt. By saving money through the overhaul, the municipalities will be able to pay that money back, without the burdening the tax payer.

 

 


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