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Troika to leave Cyprus disappointed with slow progress

24 July, 2014

The Central Bank Governor and Finance Minister were meeting with the heads of mission of the Troika of international lenders on Thursday to iron out differences and concerns over some of the delays in implementing obligations as part of the €10 bln bailout programme.
The main thorn in the discussion on the memorandum of understanding that would lead to the conclusion of the fifth review, was the delay in drafting legislation that would allow the quicker and easier repossession of properties in order to help lower the runaway rate of non-performing loans (NPLs) in Cyprus banks, one of which was shut down last year and another burdened with €10 bln in debts.
Political pressure from all parties on the government are pushing for the legislation to have some escape clauses for the first home, so as not to lead many households to lose the roof under which they live.
Sources told CNA that Thursday’s discussions aim at striking a deal between the two sides and the bill will be submitted to the Council of Ministers for approval on Monday. The bill must be endorsed by the Cabinet and approved by the House of Representatives by the end of July.
Discussions began at the Central Bank of Cyprus over technical issues of the financial sector whereas the updated MOU will be agreed in a meeting between the Finance Minister Harris Georgiades, CBC Governor Chrystalla Georghadji and the Troika heads at the Finance Ministry.
Furthermore the two sides will discuss the issue of the personal and corporate insolvency law. In case agreement is reached, the framework for the reform of the current insolvency regime will also be tabled before the Cabinet for approval next Monday.
The Cypriot authorities concluded in March 2013 an agreement with the Troika on a €10 bln bailout. So far Cyprus received four disbursements from the ESM/IMF totalling €5.77 bln.