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Int'l lenders start fresh review of Cyprus's adjustment program

Xinhua, January 29, 2015 Adjust font size:

International lenders have started a fresh round of review of Cyprus's progress in implementing a financial assistance program on Wednesday, local media reported.

Teams of a technical mission of the troika representing the European Commission, the European Central Bank and the International Monetary Fund met with officials in charge of privatizing state-owned enterprises.

As they held meetings with the Cyprus Telecommunications Authority and the Ports Authority officials, unionists protested that they have been kept in the dark on moves to privatize two of the largest state-owned companies.

In a move of displeasure over Cyprus's failure to comply with commitments on foreclosing mortgaged property, international lenders did not send to the island the heads of the technocratic teams carrying out the review.

They signaled that a full-fledged scrutiny will be made only when Cypriot authorities remove impediments on the way which prevent banks from repossessing collaterals for bad loans.

A law suspending repossession legislations is due to expire in three days but opposition parties holding a majority of seats in parliament have issued notice that they may extend the suspension for another month.

They demanded the government comes up with laws protecting small creditors against losing their primary residence, a move that would require prior approval by the troika.

By failing to obtain a positive review from its international lenders, Cyprus risks losing up to 60 million euros (67.8 million U.S. dollars) per month under the sovereign debt purchase program launched earlier in January by the European Central Bank.

Cyprus received five positive reviews for its progress in applying an economic adjustment program since it was accorded a 10-billion-euro bailout in March, 2013.

But since the middle of 2014, the government has been faced with increasing disapproval by opposition parties in applying measures demanded by its creditors.

The electoral win of the leftist SYRIZA party in Greece, which is opposed to implementing the country's adjustment program, has made things worse for the Cypriot government as opposition parties demand a similar line. (1 euro = 1.13 U.S. dollars) Endit