The Cypriot Parliament has formally endorsed the nation's fiscal plan for 2026, a comprehensive budget amounting to €13.7 billion. This significant financial blueprint was approved with a remarkably small reduction of only €10.2 million. Observers have characterised these austerity measures as exceedingly modest, given that the vast majority of allocated funds remain unchanged.
During a legislative session marked by considerable debate and numerous proposed amendments, the prevailing sentiment favoured fiscal continuity over substantial retrenchment. Out of 91 amendments presented, just 31 received parliamentary approval, indicating a broad agreement among supporting parties. These parties largely endorsed the government's financial projections for the upcoming year.
The minimal €10.2 million in cuts were primarily achieved by implementing a 5% reduction in operational expenses across various government ministries. Furthermore, proposals to deprioritise funds intended for non-existent privatisation initiatives were also integrated into the budget. This approach has been described as a marginal fiscal adjustment by proponents.
A key moment in the proceedings involved a vote on funding for ADMIE, the Greek electricity operator. A proposal to temporarily suspend funds for this project, which is crucial for the electricity interconnection between Cyprus and Greece, was narrowly defeated. The motion failed by a single vote, with the final tally showing 27 in favour and 28 against.
While ten specific allocations were frozen, the prevailing political atmosphere suggests these freezes may be temporary. Many of these suspended funds are anticipated to be unfrozen early in 2026, following upcoming parliamentary elections and the subsequent assumption of duties by new Members of Parliament.
To enhance legislative oversight, all ministries will now be required to submit bi-annual progress reports to Parliament. These reports will cover ongoing projects and national schemes, aiming to increase accountability and transparency in public fund utilisation. This new requirement will apply to significant developments such as regional regeneration and major infrastructure projects.