The question of an eventual redistribution of the State funding of political parties in Cyprus is the subject of debate between institutions and in the public sphere, especially in recent days. Following an opinion requested by the Auditor General from the Legal Service of the Republic, two main issues were raised: The redistribution of the amount received by the parties and the return of part of this amount by some parties, in the light of the results of the May 2021 elections.

The exact text of the opinion is not publicly available, with the exception of references made in the media. We retain the position of the Legal Service according to which a redistribution of the state grants is required in accordance with the vote share of parties in the May elections.

Regarding this issue, after reading and a thorough study of the Law on Political Parties L.175(I)/2012    http://www.cylaw.org/nomoi/enop/non-ind/2012_1_175/full.html, I can locate no provision in the Law and nothing derived from the spirit of the Law, that foresees, or, at least, suggests a redistribution of the funds. Let’s look at the Law and its provisions:

In the basic concepts we note the following:

  • A distinction of state funding into regular funding, which is granted to parliamentary parties for their operational needs and to grants provided for election expenses.
  • A distinction between parliamentary and non–parliamentary
  • A distinction of non-parliamentary parties into those with a share over 3% and less than 3%, a threshold that determines the right to the state grant.

The key provision on the issue of state grant, which is for financing election expenses, is in section 4.4 (b) of Law 175 (I) / 2012. It defines the rights of non-parliamentary parties, but at the same time, the wording of the note at the end of the paragraph clearly defines the distribution of funding for parliamentary parties and the effect (if any) of the election results on its distribution.

The provision based on the note (“It is further understood that the non-parliamentary parties falling under the second indent of subparagraph (iv) …) stipulates that a non-parliamentary party that meets some conditions, including securing 3% of the vote is eligible to receive a grant (ie funding of election expenses). Even more important is that the source and the formula used to calculate the sum of the grant are defined there:

  • “The amount is additional to what was originally provided for the other parties …”
  • “… which is calculated as a percentage of the total amount of the grant provided and distributed to the other parties”.

In simple maths it says that a supplement should be added to the initially approved amount. But what is the “amount initially provided”? It is simply the amount that the parliamentary parties, all the parties that were in the parliament before the elections, were entitled to. The grant to parliamentary parties, ie funding for election expenses, is given at least three months before the elections, without any precondition set in the Law. We note that no non-parliamentary party with a percentage of more than 3% emerged in the 2016 parliamentary elections, so as to be eligible for sponsorship for 2021. Therefore, if the amount distributed to the parliamentary parties was 100, based on the above provision, additional funds must be voted for non-parliamentary parties that received more than 3% in May 2021. That is, the grant will be 100+a, where a is the additional amount.

The question arises, which parties are considered non-parliamentary, and also got more than 3%, to fall into this category indicated in the note? Common logic clearly leads to this:

  • Parliamentary parties for grant purposes for the year 2021 are all the parties that were in Parliament until the election of the new one, all without exception.
  • With the same reasoning, since the grant concerns 2021, and is approved in 2020 in the state budget, the definition of “non-parliamentary parties” is linked to the time and the state of affairs at that time.
  • Thus, non-parliamentary parties (which received at least 3%) are DIPA and the Hunters Party.

It does not matter that DIPA was elected to the Parliament on May 30, 2021. For the grant 2021 purpose, DIPA falls under the definition of “non-parliamentary party”. Therefore, these two parties must receive a grant that will be added to the 100 (%) received by the parliamentary parties, ie the Parliament must request and, in accordance with the Law, the government must provide an additional budget equal to 6.10 + 3.27 = 9.37% of the amount of sponsorship given to the parliamentary parties. DIPA, as a “non-parliamentary party” in the grant scheme for 2021 is fully covered by the relevant provision and receives the amount due.

An issue arises because the Parliament (and the government?) have merged the regular financing and the grant. It is not a difficult problem to solve! Based on past practices, they can (theoretically) separate the amounts, and the grant to DIPA and the Hunters’ Party can be defined accordingly.

Is there an issue of redistribution or refund part of the funding?

I have already mentioned at the beginning that in no case does the law raise the issue of redistribution of the funding or a reimbursement of part of it. Why;

First of all, for the purpose of grants for 2021, regardless of the result of the elections, the parties that were excluded from the Parliament remain “parliamentary”, based on the situation that existed at the time of deciding the funding.

Second, there is no question of a refund of grants, for example, for the Citizens’ Alliance, which did not participate in the elections autonomously. There is a gap in the law on this issue as no preconditions are set in there that link the state grant to the way and extent a parliamentary party participated in the elections.

The most important element regarding the issue of an eventual redistribution of funding is the provision that requires additional funding for non-parliamentary parties. The relevant provision indicates that the only result that is taken care of after elections is the allocation of a grant to non-parliamentary parties. This provision would have been unnecessary and meaningless if redistribution were sought. If the legislator wanted to link the outcome of the election as a whole to the distribution of regular funding and the grant, this would have been clearly set out with a formula and a procedure. It would have provided, for example, that for the year of parliamentary elections the total amount of the state grant and regular funding would be divided into 5/12 and 7/12 and two distributions should be made, for the first five months and for the next seven.

A provision similar to the above would have led to a paradox: Why the grant given to a parliamentary party to cover election expenses, and received when the party had 25%, will it be reduced or increased / adjusted after the election? The party has already led its campaign (and made expenses), and, at the time, it had 25%, which was the basis for it.

In addition, if a party continues to operate after the parliamentary elections, and, in fact, it will contest the municipal and community elections at the end of 2021, why ask it to return part of either the regular funding or the grant? Any adjustment, with the exception of the additional budget for DIPA and the Hunters’ Party, can logically take place only for the financing of 2022.

Final note: While the law provides for a state grant, ie for the financing of election expenses for DIPA and the Hunters Party, there is no provision for regular funding for their operating expenses for 2021. However, they were operative before the election and continue to operate today. It is a gap in the law, which must be filled.