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Troika back next week for third Cyprus review

24 January, 2014

Inspectors from the Troika of international lenders will be back in Cyprus next week for the third successive review of the public reform and debt control programme as part of the 10 bln euro bailout.
Deputy IMF spokesman William Murray said that a new round of contacts will begin on Wednesday, January 29.
Murray said the IMF along with the European Central Bank and the European Union have scheduled to begin talks in Nicosia with the Cypriot government and other officials and that the talks are expected to last two weeks.
He noted that the aim of the mission was to reach an agreement on the policies that will support the conclusion of the third review of the programme. The talks will cover a wide range of issues, including recent economic developments, the policies in the financial system, the fiscal policy, and progress in institutional reforms to make the government machine leaner, efficient and less costly.
Asked when capital controls would be lifted, Murray said additional steps in this direction were expected this year, in line with the government’s roadmap, and pointed out the importance of tangible progress in the recapitalisation of the banks.
He added that the roadmap provides for the gradual lifting of restrictions “in an orderly manner”, combining such steps with tangible progress in the banking sector recapitalisation strategy, and maintaining flexibility, in order to safeguard financial stability.
Commenting on remarks that IMF projections for the recession in Cyprus were wrong, Murray reiterated that the latest report estimated a -7.7% recession in 2013 and - 4.8% in 2014, with a 0.9% growth rate in 2015.