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Troika to conclude review today

The troika of Cyprus’ international lenders comprising the EC, the ECB and the IMF should conclude their sixth review of the island’s Economic Adjustment Programme today; a revised MoU is anticipated.

troika Memorandum of Understanding (Cyprus)CYPRUS` international lenders, the European Commission, the ECB and the IMF, are set to conclude the island`s sixth economic programme review today.

The heads of the three institutions, collectively known as the Troika, will meet with the Central Bank of Cyprus Governor Chrystalla Georghadji with whom they are expected to agree the updated Memorandum of Understanding concerning the financial sector.

On Thursday, the Troika heads held a six-hour meeting with Minister of Finance Harris Georgiades and Undersecretary to the President Constantinos Petrides, covering all issues concerning the fiscal sector and the structural reforms.

Reliable sources have told CNA that the authorities have agreed that the landmark for loan securitization (sale of banking loan portfolios to non-banking third parties) is set for July.

Other sources have told CNA that the Troika was satisfied with the progress achieved on public sector reforms and that all government proposals concerning the promotion and mobility of civil servants will be incorporated in the updated Memorandum. The government proposals on the reform of the civil service should be approved by the Cabinet by the end of June, according to the timetable set by the international lenders.

Moreover, the budgetary and macroeconomic commitments of Cyprus for 2015 were also agreed during the discussions and the assessment of the European Commission for 0.5% recession in 2015 was adopted, despite the fact that the Finance Ministry expects marginal growth. At the same time the aim for primary surplus was brought forward a year, to 2015, from 2016.

The target for the budget deficit in 2015 was set at 1.5% of GDP, while the target for the primary surplus was set at 1.5% of GDP.

Regarding the insolvency framework, the lenders agreed for its implementation as it was voted by the House of Representatives in order to decide later whether there is a need for some changes.

In March 2013, Cyprus concluded a €10 billion bailout with the Troika, to avert the collapse of its banking sector and cover its refinancing needs.

– Cyprus News Agency

Readers' comments

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  • Richard says:

    @Nigel – thanks, but it would be helpful if there were a lot more clear & simple transparency on this issue. I have waded through what I can of the PIMCO report – but it’s not easy reading in places. The segments that are understandable though – point sharpely to the common view that the banks acted recklessly and have hence contributed massively to their own woes.

    As a consequence of this – they cannot expect to palm off 100% of the problem on the small-scale borrowers. If the Troika endorse this – then they expect a very strong backlash campaign in the media and via the instrument of government pressure being applied.

  • @Richard on 2015/05/12 at 10:19 am – MPs are discussing who the loans may be sold to – once agreed, the troika will review. (I know there is some reluctance to sell any loans to Turkish organisations.)

  • Richard says:

    Thanks Nigel – but the article doesn’t really intimate who the loans are being sold to.

    Another regulated banking structure – in/out European boundaries?

    What rights do borrowers have in this ‘sell off’ landscape? Especially as much of the lending was unregulated & downright reckless!

    I may be having a lapse of concentration – but the CM article doesn’t say much. In view of this – I’m inclined to support the whitewash remark…

  • UBoat says:

    “The sale of banking loan portfolios to non-banking third parties”….. Is this yet another money generating scheme for the discerning business man ? May be it could be set up and run by ex developers and banks whom caused this mess in the first place there by generating them more cash from their own non performing loan sales when the 3rd party companies take us unsuspecting buyers to court to get money which the banks say that we owe because the developers took out loans on already paid for properties as they still held the title deeds ….. ?

    “Other sources have told CNA that the Troika was satisfied with the progress achieved on public sector reforms and that all government proposals concerning the promotion and mobility of civil servants will be incorporated in the updated Memorandum”.

    The Troika was SATISFIED ? SATISFIED ! Well Why ? Pass me another can of white wash this ones run out !

  • @Richard on 2015/05/09 at 11:57 am – Basically it’s the sale of non-performing loans – which has been done in Ireland, Spain. You can read more about this at Foot-dragging ahead on sale of loan packages.

    Another action that must be completed, which has come to be known as ‘Hasikos plan’, is the absolution of borrowers who have repaid their loans, but have not secured title deeds as these may have been re-mortgaged by developers.

  • Richard says:

    “Reliable sources have told CNA that the authorities have agreed that the landmark for loan securitization (sale of banking loan portfolios to non-banking third parties) is set for July.”

    What exactly does this mean? Selling off the banks irresponsible loans to debt factoring agencies or something else?

    What will this mean for those people trying to re-negotiate loans with their banks?

    Or in the middle of legal disputes?

    More clarity needed here…

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