Interior Minister Constantinos Ioannou will be presenting a draft bill to MPs at the House interior committee on Thursday for the solution once and for all of the 40 per cent limit on municipality budgets earmarked for salaries.

On Wednesday, Ioannou met with representatives of the union of municipalities and trade unions SEK and PEO to discuss their demands regarding the 40 per cent limit on salary expenditure, which did not fully cover employee salaries.

Ioannou assured the unions that no local authority employees would be losing their jobs.

He added that, with the agreement of the finance ministry, a draft amendment do the legislation had been prepared, which would be presented to the MPs and sent to the Law Office “because there are differing interpretations as to what is considered to be expenditure”.

During Wednesday’s meeting, the minister proposed that work be done over the coming months to finalise other issues too through amendments to the legislation.

“It is a fact that the legislation as it has been approved is problematic, as it sets a specific sum of €117 million,” Ioannou said, adding that the government recognises that this amount is worth less a few years down the line.

He also said that other expenditure, such as for roadworks and licencing, had not been budgeted.

On behalf of the union of municipalities, Amathounta mayor Kyriakos Xydias said an in depth discussion would be held over the coming period.

Xydias said Cyprus should follow the model of other European countries and calculate the state grant to municipalities as a percentage of the state budget.

SEK representative Andreas Elia said the minister had been positive to their demands, adding that no dismissals of local authority staff were being discussed.

“We want the reform of the local authority to work,” Elia said, adding that any changes necessary would be made to improve their operation and provide better services to the public.

PEO representative Nikos Gregoriou said the unions had signed a memorandum with the previous interior minister that they agreed with the reforms as long as no employee would be dismissed.

He added that Ioannou had promised to do everything in his power to solve the problem with the budget.