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Next bailout tranche withheld

Cyprus will not receive the next tranche the €10 billion bailout from the troika of international lenders until it complies with the MoU regarding foreclosures and insolvency legislation.

Cyprus bailout tranche withheldFOLLOWING a meeting of the Eurogroup earlier today in Milan its president, Jeroen Dijsselbloem, made the following remarks at a press conference concerning the release of the next bailout tranche to Cyprus.

“The Troika debriefed us on the main findings of the fifth review.

“We welcomed and complimented the considerable progress made by the Cypriot authorities.

“We, however, understand that due to the latest amendments introduced by the parliament, there is one important pending issue in the current review and this relates to the legal framework for private debt restructuring, which is essential part of the next steps to be taken.

“We call on all domestic stakeholders to assume their responsibility and ensure that adequate foreclosure and insolvency legislation is in place as soon as possible, in line with the MoU.

“Once the Troika institutions confirm that the required prior actions have been successfully completed, we can proceed with the disbursement of the next tranche.”

In a statement earlier this week spokesman Simon O’Connor of the European Commission said that parts of the legislation passed by the Cyprus parliament last Saturday “are not compatible with the requirements of the MoU”; a view that was echoed by deputy International Monetary Fund (IMF) spokesman William Murray.

Readers' comments

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  • Phil says:

    When you have a lame duck President presiding over a government with NO outright power is a recipe for disaster. A hung parliament (yes I know they all should be) with no outright control having to wheel and deal all the time, watering down the original recipe, promises of high government/governmental and Banks positions in order to gain those self-serving and rewarding individuals (other party members and unions) support is not only non democratic but has NO bearing on the good for Cyprus.

    Unpopular Troika (MOU) requirements,in this case legal framework for private debt restructuring, this government and with the support the other parties have once again displayed all those qualities needed to clearly amplify that they have no respect for Troika playing cat and mouse thinking that they are being clever and that support from other EU members will break Troika.

    Who has the balls to go after the big boys with millions of non paid loans, answer only Troika because a lame duck President (past,current and future) lost his balls the day he took office.

  • MartynG says:

    Hallelujah the Troika it seems is finally going to nail some of the Cypriot fudge and take them, at least to the Brink, before thinking about letting the largely corrupt Cyprus system ‘change their arrogant minds’. But will they force RoC over the edge and see the ill founded EuroZone collapse? The Troika just have to Win this ‘battle’ and then we may see some basic Common Sense applied internally by Cyprus, clean up their clearly corrupt, selves protecting system once and for all!

  • Steve says:

    Cyprus has reneged on deals before. Notably, Christophias, or should that be Catastrophias, agreed a bailout deal, better than the current one, with the EU in 2012, but reneged on it as soon as he arrived back in Cyprus.

    The Cypriot negotiating style leaves no room for compromise; just look at the mess over the ‘Turkish Republic of Northern Cyprus’ (or the “Occupied Territories” if you like). If the same stance were to be adopted in this case, and I half expect it will be, the Cyprus position would remain as it is now on the basis that the EU and the European Central Bank dare not risk Cyprus’ pulling out of the Euro. End result could be a seriously devalued Cyprus pound as the local currency.

  • Stuart says:

    Every mortgage offer I’ve ever seen concludes with this well-known statement: “Your home may be repossessed if you do not keep up repayments on your mortgage”, so why do the financial authorities take the view that this should not be applicable under their particular administration in Cyprus?

    The MoU has consistently demanded that the authorities come up with a legal framework for private debt restructuring to ensure that adequate foreclosure and insolvency legislation is in place before the next tranche of bail-out funding can be released. Don’t the authorities appreciate that the Troika holds the purse strings?

    There are 42 pages of updated MoU to comply with and no amount of ducking and diving will convert this into a Memorandum of Misunderstanding despite the obvious attempts of the government to do so by ignoring section ‘C’ on page 8 which prohibits the introduction of any further impediments to the seizure of assets pledged as collateral.

  • Bill says:

    Maybe I am being too simplistic here, but surely, if you agree a deal then it seems a little dishonest to try and change it when the actual time of implementation draws nigh. The politicians knew very well that this was going to be a very hard part of the agreement to implement. It was accepted at the time, so, no matter how difficult, it should be carried out as per the original agreement. If anything it should have been foreseen and argued out at the time of the initial agreement not gone back on now. Is it any wonder that people have little trust in our politicians? Instead of trying to gain favor now with the people do your jobs and earn your inflated salaries.

  • demetri says:

    They are all a bunch of clowns if you ask me, the whole bunch of them, govt. “opposition” and the like, and as Mr Perdikis green party man said on a TV show on Friday, they all provide ‘backs’ to the banks and any attempt to pass laws to get in the way of this are not passed…(backs in Greek is a way of saying they are covered and untouchable)….round and round this corruption goes…govt., banks, lawyers, big developers (and the odd Dr thrown in)

    anyone disagree? it’s going to take something pretty dramatic to rid this place of these leaches…

  • steve R says:

    OH DEAR !!!!!!!

  • Deanna says:

    Well said Mike: can’t add any more to that!

  • Mike says:

    Surprised? No. Job done? Yes. How very predictable, the super patriotic champions and protectors of the common people can now be driven away in their motorcades safe in the hands of their multi personnel bodyguard detail, paid for by the common people, and sleep easy in his multi million Euro house, paid for by the common people, and they may even be arrogant enough to manage a regal like wave from the Limo to those same common people. The streets of Nicosia are truly theirs.

    No doubt we will be subjected to the unadulterated drivel in justification of their super patriotic stand via all forms of media and because of it perhaps we should have considered them as president as they hold the real power and only they can be relied upon to protect the people. Never mind the risk to the Country, the economy, our integrity on the world stage, our financial standing in future markets – they are not important because we are special. Sorry lads but if we don’t comply we will certainly be special, so much so that we will all possibly be found licking windows – from the inside! Our little centre of the Universe is now just that but also the focus of the worlds eyes and ears, not through genuine interest or sympathy I fear but due to morbid curiosity. I guess the U turn will take at least three weeks to come about.

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