Cyprus bailout review back in positive territory

GMT 00:24 2015 Saturday ,09 May

Arab Today, arab today Cyprus bailout review back in positive territory

Cyprus' Minister of Finance Harris Georgiades
Nicosia - AFP

The bailout programme of Eurozone country Cyprus is back on track after Nicosia went ahead with key reforms on foreclosures and insolvency, Finance Minister Harris Georgiades said Friday.

He told reporters he was confident that Nicosia would receive a positive review from international lenders in the coming days so EU funds could start flowing in for the first time in five months.

"We are in a position to say that significant progress has been made," he said.

"We are very close to completing the assessment that will allow Cyprus to continue to receive funding and activate quantitive easing tools," Georgiades said.

Because of delays in passing the mandated legislation, international lenders postponed their review of the Cyprus economy which is necessary for further rescue funds to be released.

The troika of international lenders -- the European Commission, European Central Bank and International Monetary Fund -- bailed out Cyprus in March 2013 to prevent a banking collapse.

On Friday, it wrapped up an assessment of the banking system and the reform agenda and, Georgiades said, needs just a few more days to study foreclosure legislation passed by parliament in April.

At the end of a week-long visit, the troika said it welcomed "the strong improvement in the public finances and the implementation of important reforms, including the recent adoption of modern insolvency and foreclosure legislation".

"The teams look forward to a swift conclusion as soon as all elements of the insolvency and foreclosure framework are available," it said.

In previous reviews, the troika has praised Cyprus for sticking to a harsh bailout adjustment programme.

The government, which clinched 10 billion euros in emergency loans from international lenders, has said it will stick to the bailout agenda no matter how unpopular it is.

Cypriots have had to endure tough austerity measures which have seen wages slashed in the private and public sectors while consumer and property taxes have also increased.

In return for the bailout, Cyprus agreed to wind down its second largest bank, Laiki, and impose losses on depositors in under-capitalised largest lender, Bank of Cyprus.

Bank of Cyprus depositors were hit with a 47.5 percent bail-in as part of the bailout package.

Recession-hit Cyprus has received around six billion euros in an adjustment programme due to run to around March 2016, although the government has said it might not need the full amount.




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