The Union of Cyprus Municipalities will stage a three-hour protest strike on August 3 as a first measure of reaction, having rejected the government’s latest funding proposal, which they claim shifts the burden of local government reform onto citizens.

The municipalities’ union deemed the interior ministry’s proposal insufficient, warning that lack of funding would lead to service cuts or increased taxes and fees.

They noted that the issue goes beyond municipal finances, highlighting the need to protect residents from the costs of state reforms.

They argued that without proper government support, municipalities would struggle to maintain services, develop projects and improve residents’ quality of life.

The union challenged the government’s claim that state funding for municipalities would double, stating the comparison was based on a reduced grant of €70.8 million, frozen since the financial crisis, rather than the €104.8 million allocated in 2010.

Government revenues rose by 132 per cent from 2010 to 2024, but state grants to municipalities will only increase by 42 per cent by 2026.

The union’s request for inflation-adjusted grants was denied.

They criticised the proposal to tie future increases to 50 per cent of growth in the state’s net primary expenditure instead of government revenues, claiming it would not guarantee stable, long-term funding.

They also opposed reviewing funding every three years, given the rising costs of energy, fuel, infrastructure, services and staffing.

The union argued that funding for main road maintenance and compensating municipalities for lost development licensing income should not be included in the basic state grant, as these are linked to local government reform responsibilities.

While supporting the reform, the union warned that inadequate funding could undermine the benefits of mergers, which enhance efficiency and service delivery, leaving municipalities unable to meet public expectations.

The union intends to present detailed evidence at an upcoming press conference.