CYPRUS and its international lenders have agreed in principle on an updated Memorandum of Understanding (MOU), following the second review of the Republic’s €10 billion financial assistance programme.
Finance Minister Harris Georgiades and the Troika heads (European Commission, European Central Bank and the IMF) will meet again tomorrow to clarify the last remaining issues that would close the updated MoU.
Finance Ministry sources told CNA that the thorniest issue during the second review that began on October 29 was the drafting of a plan for privatizations. Cyprus and the Troika agree that this plan should be made available in December, although the MoU stipulated that this plan should be ready by the end of November.
Furthermore, the Troika conceded to an extension to the drafting of a plan for the implementation of the National Health Scheme until January 2014. Cyprus requested the extension to make sure that the implementation of the NHS would not burden vulnerable groups.
Today`s meeting also covered the pending issues with regard to the banking sector.
Excluded from the international markets, Cyprus applied for financial assistance to cover its fiscal needs and to rescue its two largest bank hit severely by deteriorating assets amid the financial crisis and by the Greek sovereign debt haircut. The Cypriot authorities and the Troika (EC, ECB and the IMF) agreed last March on a €10 billion bailout, featuring haircut of uninsured deposits. So far Cyprus has received €4.7 billion.
Source: Cyprus News Agency
Update 11th November
The Revised Memorandum of Understanding dated 6th November 2013 may be downloaded by clicking here.
A new MoU should state that homebuyers will not lose their homes because of developer mortgages. Why else would they give an island with under 1 million inhabitants, in excess of 10 Billion Euro.
NO surprise at all about the ‘thorniest’ issue re Privatisations. LOTs do ducking n divin going on and clearly very little progress made.
Even ‘thornier’ though may well be “Earlier today the Finance Minister and the Troika agreed an updated MoU; discussions included the avoidance of mass and uncontrollable liquidations resulting from non-performing loans.”
We probably all recognise by now that the vast majority of these ‘NPLs’ have yet to be addressed, acted upon. Unlike Ireland, Portugal, Spain, countries that immediately started work on the ‘nasties’ soon after the Crash in 2008, Cyprus hasn’t really started to address the massive numbers – and amounts! – of, quite simply ‘Bad’ loans and overdrafts. All this largely due to sloppy, probably even non-existent!, assessment and appraisal processes and, even worse, lack of realistic ongoing ‘credit control, amounting to glaringly obvious attempts to leave the resultant ‘problems’ un-addressed. All this significantly adversely impacted by the almost unbelievable multi-layered lending and ‘security’ aspects that have left ‘multiple’ and overlapping mortgages, and absence of Title Deed issue, yet to be somehow ‘unravelled’.
Even more than trying to force Privatisations through, the Troika are right: trying to ‘sort’ (regularise) this unholy tangled mess could well become THE biggest issue during 2014, with ‘who-knows what’ further effects on already nigh-on dormant commercial and residential property markets across the country.
Next will be an extension on the issuing of title deeds. The issue of dodgy loans propped up on collateral supposedly belonging to others is so significant yet it hasn’t been tackled at all by government. Surely the troika know this and will be pushing for answers. How much longer can the government hold out and fail to publish how it will be dealt with.