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Roundup: Cyprus' international lenders conclude sixth economic review

Xinhua, May 9, 2015 Adjust font size:

Cyprus' international lenders concluded their sixth review of the country's progress in implementing an economic adjustment program agreed under a 10-billion-euro bailout in March 2013, Cypriot Finance Minister Harris Georgiades said on Friday.

But Georgiades said teams of technocrats representing the troika -- the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF) -- had not yet drafted their report which would open the way for more financial assistance.

It would also qualify Cyprus for the ECB's quantitative easing program, which could inject up to 500 million euros (about 562 million U.S. dollars) into the eastern Mediterranean island's economy over the next 18 months.

"It will take a few more days of paperwork from a distance on a technocratic level in connection with the framework legislation for insolvency and repossessions," Georgiades said.

The troika technocrats returned to Cyprus to continue their review after a hiatus of more than six months caused by the passing of legislation suspending the repossessions legislation.

Georgiades did not give any details, but sources familiar with the negotiations said the troika would issue a final report after the government submits two draft bills regulating repossession issues.

One of the bills is to regulate the selling of banks' debt packages to non-banking institutions. The other bill will deal with properties which have been paid for by buyers but are still held by banks as security for debts owed by land developers.

"We expect to get a final positive appraisal within a few days," Georgiades said.

He added that he was confident Cyprus would be able to beat EC projections that it's economy would remain in recession this year.

The EC said in its spring projections for member countries that the Cypriot economy would record a shallow recession of 0.5 percent at the end of 2015, improving from a recession of about 2.5 percent at the end of 2014.

Cyprus has been in recession since mid-2011 after being shut out of international markets.

"Exiting the cycle of recession remains a target for this year, along with the restoration of Cyprus' ability to finance it's needs through the markets, that will allow the bailout program to run its course in 10 months," said Georgiades.

Cyprus was able to raise 1 billion euros from international investors at a nominal interest of 3.87 percent at the end of April. Endit