In a letter sent Wednesday to the House Speaker, Annita Demetriou, the Auditor General, Andreas Papaconstantinou, requested that the House Accounting Office temporarily freeze the payment of the 2026 state grant to political parties, amounting to €7 million, until the Attorney General, George Savvides, issues an opinion on whether the €2.6 million that parties unlawfully received in 2018 and 2021 should be offset. In other words, whether these amounts should be deducted from the €7 million that parties are due to receive this year.
Papaconstantinou requested this legal opinion as the House Accounting Office is expected to process the transfers to the parties this week. Specifically, the rounded amounts that parties will receive as the 2026 state grant are as follows: DISY €1,980,000, AKEL €1,620,000, DIKO €890,000, ELAM €591,000, EDEK €587,000, DIPA €546,000 and the Green Party €434,000.
The issue of the €2.6 million owed by the parties has remained unresolved for the past five years, as the Ministry of Finance and the Legal Service on one side, and the House of Representatives on the other, dispute who is responsible for recovering the money.
It is noted that the Accountant General, Andreas Antoniades, in a letter dated 25 February 2025 to the President of the House, requested that the offsetting procedure be applied when paying the 2026 state grant. The House, however, argues that it is not legally authorised to carry out offsets or to recover the €2.6 million through legal action, pointing instead to the Attorney General as the competent authority. Nevertheless, the Deputy Attorney General, Savvas Angelides, who ruled that the 2021 state grant had been paid incorrectly, has to this day taken no legal action against the parties.
Due to this unjustified inaction, the Audit Office warned in a report last June that there is a serious risk that the Republic of Cyprus will ultimately lose the €2.6 million.
The Unlawful Grants
Extraordinary state grant for the 2018 presidential elections. According to the Audit Office, all eight parliamentary parties that received extraordinary state funding for the 2018 presidential elections must return €2,091,200 to the state. This amount represents the unused portion of the extraordinary grant they received.
The extraordinary grant, totalling €2.5 million, was given to the eight parliamentary parties to cover their election expenses. However, instead of using it for that purpose, the candidates covered their campaign costs through private donations, while the parties kept the public money to cover their operating expenses. Under the legislation in force at the time, the extraordinary grant was to be used exclusively for campaign expenses. Therefore, any unused amounts should have been returned to the state treasury.
Regular state grant for 2021. The Audit Office found that the regular state funding for parliamentary parties in 2021, totalling €6,649,451, was allocated in February 2021 based on the results of the 2016 parliamentary elections. As a result, parties that entered Parliament after the May 2021 elections did not receive a single euro of state funding for that year. If nothing changes, the same is expected to occur after the upcoming parliamentary elections in May. The 2026 state grant will be allocated in January, leaving any newly elected parties without funds.
Based on the opinion of the Deputy Attorney General, Savvas Angelides, the Ministry of Finance asked four parties to return a total of €577,511, which they had received as the 2021 state grant without being entitled to it. The amounts are as follows: Citizens Alliance €277,429, Solidarity Movement €251,203, DIKO €47,321 and AKEL €1,558. Once recovered, the €577,511 must be redistributed among the remaining five parties as follows: DIPA €318,591, ELAM €145,750, EDEK €59,305, DISY €37,069 and the Green Party €16,796.
To date, the only party that has returned money is AKEL. Eleni Theocharous of the now defunct Solidarity Movement is awaiting official notification of the amount she must return. The President of DIKO, Nicolas Papadopoulos, has made it clear that he will not return the €47,321, as he believes it was correctly paid to the party. The Citizens Alliance is under liquidation, and the Republic is not listed among its creditors.
House: Not Our Responsibility
In a letter sent on 8 August 2021, by the former Director General of the House, Tasoula Ieronymidou, to the Attorney General and the Ministry of Finance, the House set out the reasons why it believes it is not authorised to recover the €2.6 million from the parties, either through legal action or through offsets. Among the arguments presented were the following:
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Institutionally, the House of Representatives is a constitutional authority and not an entity of the general government or a public law body that receives state grants, loans or guarantees. It also has no revenue of its own, so it cannot take measures to collect or recover funds, nor can it sue or be sued.
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The amount budgeted in the House budget for the state grant does not constitute revenue. Therefore, the House's accounting officer cannot, under the Fiscal Responsibility and Budget Framework Law, be instructed to take action to collect it.
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The level of the state grant is determined by the Council of Ministers, included in the state budget and allocated according to the procedure set out in the relevant article. Consequently, the House does not have a budgeted reserve and, constitutionally, has no ability to cover any amount that may be required now or in the future to satisfy political parties entitled to regular funding, for example through a supplementary budget.