Euro zone finance ministers will meet to bolster the European
Nicosia - XINHUA
Finance Ministers of the Eurozone meeting in Brussels approved the release of a 350-million-euro bailout tranche (433 million U.S. dollars) for Cyprus which had been put on hold for about two months, state radio of Cyprus reported on Thursday.
A news report carried by the state broadcaster said the ministers endorsed a working document which said Cyprus has met the remaining two conditions for the release of the sixth tranche of a 10-billion-euro bailout agreed in March, 2013.
These related to the enactment of a law on foreclosures and the abrogation of framework legislation which the Eurogroup considered to be an impediment to the repossession of mortgaged properties by the banks.
Cyprus's Finance Minister Haris Georgiades said that the Cypriot economy is on the right track after two years of austerity and reforms but added that the remaining part of the adjustment program will be diligently applied throughout its entire duration.
However, the Eurogroup warned that the release of the tranche will again be suspended should anything happen between now and December 8 which would contradict its findings.
This was a clear warning to Cypriot opposition parties, which announced moves to block the enforcement of legislation on foreclosures until legislation regulating insolvency is approved by parliament by the end of this year.
Opposition parties, which command a majority in parliament, had pushed through the original framework legislation on foreclosures that led to the suspension of further payment to Cyprus. The legislation was subsequently annulled by the High Court for running against constitutional provisions.
The working document of the Eurogroup meeting said it found that Cyprus has complied with the conditions set in the fifth review of its economy by troika technocrats representing the European Commission, the European Central Bank and the International Monetary Fund.
The next review of the Cyprus economy is scheduled to be carried out in January.
The Eurogroup tranche will be complemented by an additional 86 billion euros by the IMF.
Troika experts are due in Cyprus next week to consider further legislation setting the framework on insolvency which is currently drafted by the government.
Both the foreclosures and insolvency legislation is crucial for the island's banks, which face non-performing loans amounting to over 27 billion euros or 50 percent of their loan portfolios. (1 euro = 1.24 U.S. dollars)