**Nicosia, Cyprus** – The Cypriot Parliament has formally sanctioned the state's fiscal blueprint for 2026, a comprehensive budget of €13.7 billion, which has been approved with a remarkably modest reduction of just €10.2 million. This minimal trimming, amounting to a mere 0.078% of the total expenditure, has led observers to characterise the austerity measures as a whisper rather than a roar, with the vast majority of allocated funds remaining unaltered.
The legislative session, which saw heated debate and a significant number of proposed amendments, ultimately favoured fiscal continuity over substantial retrenchment. Out of 91 amendments submitted for consideration, a mere 31 garnered parliamentary approval, underscoring a general consensus among the supporting parties – DISY, DIKO, ELAM, DIPA, and EDEK – to largely endorse the government's financial projections. The opposing AKEL and the Greens, while supporting the budget’s overall passage, had earlier advocated for a freeze on funds intended for ADMIE, the Greek electricity operator, a motion that narrowly failed to pass.
The €10.2 million in cuts were primarily achieved through a 5% reduction in operational expenses across various ministries. Additionally, proposals to de-prioritise funds earmarked for non-existent privatisation initiatives were also incorporated, contributing to the overall, albeit marginal, fiscal adjustment. This approach, according to DISY MP Harris Georgiades, highlights the reality that "The two approved cuts represent just 0.078% of the total budget."
A pivotal moment during the proceedings was the vote concerning the allocation of funds to ADMIE. The proposal to temporarily suspend funding for the Greek electricity operator, a project intricately linked to the crucial electricity interconnection between Cyprus and Greece, was defeated by the slimmest of margins – a single vote, with the tally standing at 27 in favour and 28 against. This outcome suggests that while parliamentary scrutiny of such strategic infrastructure projects is intensifying, the immediate impetus for a complete halt was not sufficient.
The parliament did, however, approve ten specific freezes on allocations. Nevertheless, the prevailing political sentiment, particularly in the lead-up to the May parliamentary elections and the subsequent assumption of duties by new MPs in June, suggests these freezes are likely to be of a transient nature. It is anticipated that many of these suspended funds will be unfrozen within the initial two months of 2026, as the political landscape shifts.
In a move designed to enhance legislative oversight, a new requirement has been mandated for all ministries. Henceforth, these government departments will be obliged to furnish the Parliament with bi-annual progress reports on a range of ongoing projects and national schemes. This measure aims to bolster accountability and ensure greater transparency in the utilisation of public funds, particularly concerning significant developments such as the Troodos region's regeneration, the Cyprus Sports Organisation's initiatives, and the ambitious redevelopment of the Larnaca Marina and Port. Projects like the construction of a new embassy building in New York and a road project in Nicosia will also fall under this enhanced reporting regime. While the 2026 budget has been approved, the impact of these minimal cuts on the broader economic landscape remains to be seen, though the emphasis appears to be on continuity rather than radical fiscal surgery.