The House of Representatives has formally endorsed the state budget for 2026, a significant fiscal blueprint totalling €10.7 billion, which is slated to take effect on January 1st of next year. This legislative approval, secured by a majority of 37 votes to 19 on Wednesday, occurred against a backdrop of fervent opposition warnings concerning the escalating cost of living and its palpable impact on Cypriot households. While the government champions the budget as a strategic roadmap for digital transformation and social welfare designed to insulate the Republic from regional economic volatility, dissenting voices argue that its emphasis on fiscal surpluses inadvertently overlooks the declining purchasing power experienced by citizens.
Finance Minister Makis Keravnos vigorously defended the proposed financial framework, characterising the budget as a "balanced and developmental" strategy. He asserted it aims at fostering "long-term sustainability in a constantly changing political environment." However, this assertion was met with considerable scepticism from opposition parties, notably the left-wing AKEL and the Movement of Ecologists-Citizens’ Cooperation. These groups contend that the administration's preoccupation with accumulating surpluses comes at the expense of addressing the immediate financial pressures faced by ordinary families, whose real incomes are demonstrably shrinking.
Beyond the overarching state budget, parliamentary discussions also saw the approval of allocations for the Ministry of National Education and the Audit Office. Debates surrounding the education budget, which passed with a considerable sum, delved into critical issues such as the capacity of the system to accommodate population growth and the maintenance of educational standards. Opposition MPs voiced reservations about the perceived inadequacy of the current educational strategy, questioning its vision and responsiveness to contemporary challenges. Specific concerns were raised regarding the need for improved infrastructure and the imperative to integrate crucial modern themes into the curriculum.
Similarly, the Audit Office's budget became a forum for a contentious debate concerning a general circular issued by the Ministry of Finance. A CTP Milletvekili explicitly alleged that this directive had "caused damage to public finance," suggesting a potential contravention of the Insurance Services Law and raising the spectre of revenue loss for the state.
The passage of the 2026 state budget signifies a pivotal moment in the Republic of Cyprus's fiscal planning, underscoring a clear divergence in political perspectives on economic priorities. The increased primary spending, along with a rise in social benefits and developmental expenditure, are intended to stimulate growth and enhance societal resilience. Nevertheless, the persistent undercurrent of concern regarding the cost of living suggests that the government faces an ongoing challenge in translating its fiscal objectives into tangible improvements in the daily financial realities of its populace.