Troika, Cyprus gov't agree on updated MOU

Cyprus and its international lenders have agreed in principle on an updated MOU, following the second review of the Republic’s €10 billion financial assistance programme.

Finance Minister Harris Georgiades and the Troika heads (European Commission, European Central Bank and the IMF) were meeting on Thursday to clarify the last remaining issues that would close the updated MOU.

Finance Ministry sources said that the thorniest issue during the second review that began on October 29 was the drafting of a plan for privatizations. Cyprus and the Troika agree that this plan should be made available in December, although the MOU stipulated that this plan should be ready by the end of November.

Furthermore, the Troika conceded to an extension to the drafting of a plan for the implementation of the National Health Scheme until January 2014. Cyprus requested the extension to make sure that the implementation of the NHS would not burden vulnerable groups.

Today`s meeting also covered the pending issues with regard to the banking sector.

Excluded from the international markets, Cyprus applied for financial assistance to cover its fiscal needs and to rescue its two largest bank hit severely by deteriorating assets amid the financial crisis and by the Greek sovereign debt haircut. The Cypriot authorities and the Troika (EC, ECB and the IMF) agreed last March on a €10 billion bailout, featuring haircut of uninsured deposits. So far Cyprus has received €4.7 billion.