Municipalities threaten work stoppage over payroll concerns

The union of municipalities on Tuesday called on President Nikos Christodoulides, to clarify the government's position, threatening "decisive measures" and the suspension of their services if no agreement can be reached by November 10. After a broad meeting of mayors and municipal secretaries on Monday, we "proceeded to formulate a unified and non-negotiable position to ensure the financial sustainability of the municipalities," they said. During the meeting, the municipalities brought up several issues they face since the introduction of local government reforming, expressing concern about how the implementation of government's commitments was proceeding. However, when asked about it on Tuesday, Christodoulides said that he considered the matter closed. In a letter addressed to Christodoulides, the union said the government had failed to honour agreements including the funding of 60 per cent of lost licensing revenue, the securing of funds for road network maintenance and the disbursing of funds for development projects in newly established municipalities. Additionally, the union demanded clarification over budgetary limits that allow municipalities to spend only a maximum of 40 per cent of their budget on payroll. However, authorities later decided that capital invested in infrastructure would not be regarded part of the annual budget, therefore shrinking the size of the pie used to calculate payroll costs. As less money could be spent on wages, the union feared that municipalities would be inclined to buy services from the private sector to make ends meet, which could eventually lead to job cuts. "[We] demand the president immediately clarify the government's position in a written statement by November 10, the date set for the ordinary general assembly of the union of municipalities," the union said. Local governments could no longer operate under conditions of financial uncertainty, the union stressed. They warned of possible shutdowns of municipal services if the president responded negatively. The union called for the 40 per cent payroll limit to be applied on all municipal expenditure, including infrastructure, and the full adjustment of state funding to inflationary trends, arguing that the estimated need for the year 2026 amounted to an additional €24 million. Last week the union underlined that stressing that the failure to comply with the agreements creates reasonable concern and undermines trust between the municipalities and the state. In a letter, the union noted that during an earlier meeting with Interior Minister Constantinos Ioannou and a finance ministry representative, delays and ambiguities regarding key financial issues from previous agreements had been acknowledged.