**Nicosia, Cyprus** – 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. The 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, who presented and vigorously defended the proposed financial framework, characterised the budget as a "balanced and developmental" strategy aimed 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, the parliamentary session also saw the approval of allocations for the Ministry of National Education and the Audit Office. Discussions surrounding the education budget, which passed with a considerable sum of 23 billion 231 million 841 thousand TL, delved into critical issues such as the capacity of the system to accommodate population growth, the maintenance of educational standards, the management of class sizes, and the provision of essential support for disadvantaged children. Opposition MPs voiced reservations about the perceived inadequacy of the current educational strategy, questioning its vision and its responsiveness to contemporary challenges. Specific concerns were raised regarding the need for improved infrastructure, such as earthquake-resistant school buildings, and the imperative to integrate crucial contemporary themes like digitalization, the EU Green Deal, artificial intelligence, lifelong learning, and climate-friendly initiatives into the curriculum.
Similarly, the Audit Office's budget, approved at 184 million 653 thousand TL, became a forum for a contentious debate concerning a general circular issued by the Ministry of Finance on December 5th. CTP Milletvekili Devrim Barçın explicitly alleged that this directive had "caused damage to public finance," suggesting a potential contravention of the Insurance Services (Regulation and Supervision) 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 and the most effective means of safeguarding citizen welfare. The increased primary spending of 5%, amounting to an additional €508 million injected into the economy, alongside a 6.7% rise in social benefits and a 4.7% uplift in developmental expenditure – largely channelled through the Recovery and Resilience Plan towards green and digital transitions – 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. The debates surrounding specific ministries and financial directives also highlight the crucial role of parliamentary oversight in ensuring fiscal accountability and the effective allocation of public resources.