Roundup: Cyprus' int'l lenders conclude review of its economy

Cyprus' international lenders have completed a review of the eastern Mediterranean island's economy, putting its bailout program back on track, a statement said on Wednesday.

Cyprus concluded a 10-billion-euro bailout package in 2013 which was tied to a strict economic adjustment program and also to the resolution of its banking system. It marked the first time in the world that banks had recapitalized using creditors' money, claiming uninsured deposits over 100,000 euros (110,830 U.S. dollars) to do so.

Teams of technocrats representing the European Commission, the European Central Bank and the International Monetary Fund said in a joint statement that all elements were now in place for the conclusion of their assessment.

They said repossessions and insolvency legislation, which had been suspended for many months, was now being applied.

The review on Cyprus' progress in implementing an economic adjustment program has been in doubt for more than six months following the suspension of legislation for the repossession of mortgaged properties.

However, the technocrats warned that the country needs to take more actions to reduce non-performing loans, including enacting legislation to facilitate the sale of bank loan packages.

Cypriot authorities are drafting legislation for the sale of loan packages to buyers after they are vetted by the island's central bank.

The report issued by teams of technocrats representing international lenders, collectively known as the troika, also called on Cypriot authorities to keep the momentum of structural reforms saying that their core element should be the restructuring of the public administration.

"The timely application of the plan for privatizing state-owned corporations is necessary for increasing economic efficiency, attracting investments and cutting back the public debt," said the report.

The report has to be officially endorsed by the Eurogroup and the IMF.

The IMF's executive board is scheduled to consider the report on June 16 and give the go-ahead for the release of an 86-million-euro loan tranche which it has been holding back since last October.

An official seal on the report will also open the way for the purchase of Cypriot bonds by the European Central Bank under its quantitative easing program.

Cyprus stands to benefit by up to 500 million euros in fresh money by the end of the program next year.

Finance Minister Harris Georgiades has said the completion of the troika review will also open the way for borrowing from international markets, from which Cyprus has been shut out since 2011.

International lenders have released just over 6 million euros in financial assistance to Cyprus and authorities said they may not need to borrow the entire 10-billion-euro amount.

Cyprus' bailout agreement comes to an end in 10 months. Endit