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Budget for 2018 with elections in the background

The Ministry of Finance’s Budget Office is sieving the budgets of ministries and independent services, as part of the preparation of the state budget for 2018, along with the mid-term fiscal framework for 2018-2020.

This will be the final budget prepared by the Anastasiades administration, since come February a new government will be formed.

The budget for 2018 will be accompanied by an increase in spending, part of a wider fiscal loosening by the government.

The Anastasiades administration has decided, among other measures, to cover the loan expenses of local governments valued at €178.3 million. The government will pay back the loans in annual instalments of €11.3 million.

Also decided is the compensation of the pension funds that were subjected to a haircut. Specifically, €166 million will be channelled towards the additional and gradual compensation of those who retire at age 65, so that their pension funds are effectively subjected to a 25% haircut rather than 50%.

At the same time, more than 1,000 promotions in the public sector have been made available, subject to approval from the House of Representatives.

Due to the upcoming February presidential elections, the balance of power in the House of Representatives rests on thin ice. The government considers the 18 votes of ruling DISY to be a given, but it is uncertain of the intentions of AKEL’s 16 MPs, DIKO’s 9, EDEK’s 3, Solidarity’s 3, Alliance’s 3, 2 from the Green party and 2 from ELAM, along with independent MP Pavlos Mylonas.

DISY, DIKO and Solidarity had voted in favour of the 2017 budget, with all other parties voting against it.

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