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Troika technocrats start new assessment of Cyprus

Xinhua, April 28, 2015 Adjust font size:

Teams of technocrats representing Cyprus' international lenders began a new assessment of the country's compliance with its bailout terms following the approval by parliament of insolvency legislation, the Central Bank of Cyprus said on Monday.

It said the teams from the European Commission, the European Central Bank and the International Monetary Fund, collectively known as the troika, will conclude their assessment of the banks by April 30.

The troika will return on May 6 to complete a survey for the rest of the economy which was left in suspension since last October.

The troika discontinued its fifth survey of Cyprus' progress in implementing its economic adjustment program provided for by a 10-billion-euro (about 10.9 billion U.S. dollars) financial aid deal concluded in early 2013, after parliament suspended the foreclosures legislation six months ago.

The legislation is intended to help the banks restructure non-performing loans which amount to 50 percent of their loan portfolios, or about 27 billion euros.

The Central Bank said the troika technocrats will discuss with commercial banks the Central Bank itself issues concerning the restructuring of non-performing loans and bank supervision matters.

A European Central Bank spokesman in Frankfurt, commenting on the presence of the troika technocrats on Cyprus, said that it has not yet been decided whether the insolvency legislation is adequate to allow the conclusion of the outstanding review.

Cyprus' bailout program will end in March 2016. The eastern Mediterranean island has received about half of assistance amount and Fitch Ratings Agency said in a statement at the end of last week that Cyprus may not need to draw the entire amount.

The conclusion of Cyprus' assessment will open the way for the European Central Bank to buy sovereign bonds as part of its quantitative easing program.

Cyprus is a member of the Eurogroup since 2008 but it has been excluded from the program because of the unfinished survey.

The island stands to cash up to 500 million euros from the program, allowing it to finance development projects that will help it out of a recession which started in mid-2011. (1 euro = 1.09 U.S. dollars) Endit