By Constantine Callaghan for Southeast European Times in Nicosia -- 27/08/12
Kythrea is one of 30 municipalities in Cyprus facing significant problems after the government instituted budget cuts. [Constantine Callahan/SETimes]
Cyprus is facing a growing difficulty to finance its municipalities at a time when the eurozone country is requesting a EU, ECB, IMF Troika bailout and the government is cutting municipal funding by nearly a third.
"[We have managed] to deliver services such as waste disposal, but with the onset of government cuts, it is becoming increasingly difficult," Kostas Petrou, mayor of Ayios Dhometios, a large Nicosia suburb, told SETimes .
Cyprus is the eurozone's third smallest economy, but analysts said the country is in the worst financial condition since 1974, given the local banks' exposure to the Greek debt.
In the months preceding Nicosia's bailout request, the government slashed the budget from 90 million euros to 70 million euros.
"[T]he municipality has undoubtedly been affected by government spending cuts. In turn, we have had to economise, but we are not in danger of closing," Antonis Tsokkos, mayor of Ayia Napa, a popular resort town, told SETimes.
Lefkara, a rural municipality in the southern Larnaca district, has had to make concessions in order to operate as usual.
"While the coastal municipalities like Ayia Napa benefit from the injection of tourism during the summer, the inland municipalities have a harder time since we do not receive as many tourists," Savvas Xenofontos, Lefkara mayor, told SETimes.
Xenofontos said that his municipality secures money by freezing civil servant salaries, which are above 2,000 euro per month.
Some argue that 30 municipalities is excessive for a country of 800,000 -- Nicosia, a city of 200,000, has eight municipalities -- but officials argued that centralising services would make the municipal system more effective.
"Yes, I believe they are too many but I have made efforts to form co-operation with other municipalities. For example we are making efforts to join forces with the neighbouring town and co-operate in areas such as waste collection," Tsokkos said.
In neighbouring Greece, the government transformed local government in 2010 by reducing the number of municipalities from 5,800 to 1,034, and centralising more municipal responsibilities.
Yet, as the Greek debt crisis deepens, government funding is decreasing and the newly formed municipalities have found it increasingly challenging to function.
Since the 1974 conflict, nine former municipalities in the north were moved south of the UN buffer zone that divides the island.
"With the economic problems, together with the government reducing funding and no solution to the Cyprus question, the situation is the worst it has been since 1974," Ioannis Papaioannou, mayor of Karvas municipality, one of the nine, told SETimes.
Papaioannou said that it is important to have a municipality temporarily housed in south Nicosia despite it not having real authority over its former area.
"It gathers the refugees, displaced people and numerous Cypriots from Karavas who have immigrated abroad. We try to maintain our cultural traditions as well as to remember where we came from," Papaioannou said.
While the Nicosia government subsidises the nine municipalities, most of the funding has come from donations within Cyprus and from arrears.
But donations are lagging too under the stress of the global financial crisis.
"Every year we publish a magazine about the municipality's activities and about Karavas. We need 10,000 euros to do this. This year we cannot go ahead with the publication because we simply do not have the funds we need," Papaioannou said.
Source: SETimes.com
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