Municipalities on Monday called off the measures they had earlier threatened – including halting payments – over the non-approval of their budgets.

In a statement, the Union of Municipalities said that just prior to the announcement of their planned measures last week, only a single municipality’s budget had been approved. But since last Thursday, ten more budgets got the nod, while five more are under review and expected to get the green light by the end of this week.

“This decision indicates goodwill, and creates the expectation for more positive developments,” read the statement. “The Union expresses its satisfaction with the speeding up of the processes and with the response of the interior ministry.”

The matter will be discussed anew at the House interior committee later this week, said Andreas Vyras, head of the union.

But he warned: “The Union of Municipalities clearly reiterates that municipalities will not bear the cost of any inertia on the part of government departments.

“We demand clear-cut and immediate solutions to the problems we face.”

Last week Vyras had warned that municipalities would stop payments on obligations by Monday, and suspend payroll by the end of the month if their budgets remained unapproved.

He added that the situation was causing significant problems, particularly in awarding contracts for public works.

“Not only have we failed to achieve the financial and administrative autonomy we aimed for, but the situation is getting worse,” he said, adding that the grace period had “run out”.

Vyras argued that making further payments without an approved budget would put local bodies in the position of acting illegally.

A further concern is the interior ministry’s decision to cut subsidies for municipalities with a surplus, a move Vyras deemed unreasonable.

He also pointed out that the new local bodies had inherited degraded infrastructure, with no clear funding source for promised repairs.