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Tuesday 11th August 2020
Home Articles Does the Troika have the guts to push with NPLs

Does the Troika have the guts to push with NPLs

gutsTHE inspectors from the Troika of international lenders could not have come at a better time to get a true picture of what is really going on in Cyprus (or, who is kidding whom).

First, the House Ethics Committee report revealed that senior officials at the Bank of Cyprus, most of whom have since left, duped shareholders and customers all these years and have been rewarding each other with truckloads of loans with little or no cost and minimal security. The same report found equally ghastly abuses at Popular Laiki with millions of euros worth of loans going unaccounted for and, once again, with little or no security.

Secondly, the snail’s pace of the recovery process at Bank of Cyprus does not bode well for the bank’s efforts to reduce its non-performing loans, which have been creeping up, instead of going down. The problem there is the unwillingness of loan and mortgage holders to pay back their dues and in a regular manner, something which has drained the bank’s new lending capability, ultimately strangling SMEs many of whom are resorting to closure. In other words, there is no hope of any growth in any sector, as long as large borrowers continue to laugh in the face of the government, the banks and the Troika.

Can the international lenders do anything? Well, with all parties now having digested the fact that the Eurogroup experiment last year was a total failure, it’s time to make amends by tweaking and pushing the adjustment programme to force the government and the banks to cash in on the naughty borrowers. Or else…

Talk of ‘large scale development’ is nothing more than a smokescreen by a handful of entrepreneurs who insist on proving their manliness by refusing to repay their loans, many of which are long overdue. It’s not that they can’t – they just won’t.

So, if these fat cats refuse to cooperate, then the Troika should punish the government, that is in denial and refuses to deal with the problem, despite statements that there is no intervention of any kind at any level. No progress on NPLs, no clean bill of health, they should say.

What this past year has proven, yet again, is that a handful of entrepreneurs, their smart lawyers and their creative accountants, continue to call the shots and politicians are only too keen to bend over backwards (or any other way) to satisfy these crooks, perhaps because of their own crookedness, or downright stupidity.

Troika non-performing loans


  1. @nigel mutton – non-performing loans are those that have not been serviced for 90 days – I do not know if this would be true in your case.

    Also if the mortgage was lodged at the Land Registry after your contract of sale was lodged it will only apply to the unsold properties on your estate.

    I suggest you ask the Land Registry for a ‘Title Search’ – a guide, information and forms are available at New title search procedures in Cyprus.

  2. Your comments about non performing loans in Cyprus concern me as I have a house and I understand that Aristo have mortgage out on our complex even though we have all paid the full price for the individual properties. Would this be one of the non performing loans you are talking about

    Nigel Mutton

  3. I had thought that the French word for thief was ‘voleur’. This article shows that I have been wrong and the French word for thief must be ‘entrepreneur’.

  4. Thankfully, we have the Financial Mirror editor Masis der Partogh to keep ramming home to the Cyprus establishment that unless the banks seriously tackle the monster NPLs of big developers then the economy will remain the sick man of south-east Europe.

    I am with SoOJB in not expecting much help from the Troika or its constituents re the Cyprus Property Scandal. In my 2013 book Corporate Risk & Governance, I wrote in relation to GRECO (the Council of Europe’s anti-corruption unit): “It has neither the remit nor the resources to find out about the real extent of corruption in a country or to enforce any recommendations that it makes in its reports. In this respect, GRECO is rather like the EU Commission, which has no remit, resources or mechanism to monitor and audit compliance with EU Directives in member states. National governments are left to comply ‘on their honour’ and many have shown a propensity for evasion, dissimulation and downright lies in their responses to such supra-national bodies. GRECO recommendations are largely ignored, evaded, diluted or delayed by recalcitrant governments. Even where it may have some scope for imposition of limited penalties, the EU Commission has shown itself very reluctant and slow to do so. To that extent, by being unwilling or unable to ‘get their hands dirty’ with compliance and specific cases of non-compliance, both GRECO and the EU Commission have tarnished their images and reputations and engendered widespread contempt among populations who, not unreasonably, expect such bodies to offer them real protection and not act like paper tigers.”

    In a chapter specifically on immovable property fraud, I added: “….EU Justice Commissioner Viviane Reding has proposed 2013 as the ‘European Year of Citizens’ during which ‘the Commission will need to demonstrate a European system of justice that has the capability to link, overlay and check national legal systems in a way that can produce some sort of coherent whole as citizens go about their daily lives’. Unfortunately, such fine rhetoric is likely to sound hollow and meaningless to the thousands of aggrieved victims who remain unprotected, without redress and deeply cynical and mistrustful of the EU and its Commission. They will not be expecting that Commissioner Reding will wave a magic wand in 2013 and deliver even a scintilla of protection and justice for them any time soon.” And so it has been.

  5. At last – someone has written an article that goes right to the heart of the matter. Well Done!

  6. Cyprus the floating military base is safe and knows it hence the lack of meaningful change. Troika happy. Cypriot government happy. Developers are very happy!

  7. The “Cyprus solution” imposed by the Troika has been in place for one year and it isn’t working. The north-european countries who have to pay for the financial indiscretions of Southern Europe and Ireland are WASP (white ango-saxon protestant) countries so we have to have an element of punishment and that’s maybe a good thing because it acts as a future deterrent. The problems is that the solution isn’t working, because the punishment is too severe and that goes back to ex-president Christofias’ snubbing the previous better offers from the rescuers and thinking he could go to the Russians and the Chinese for help, only to find that there was in each case an unacceptable price to pay.

    The true situation of what is going on in Cyprus is more serious now than it was before the “Cyprus solution” was implemented. The effects of the depressed housing market is massive. Take a ride up Mesogi Avenue on the Paphos-Pois road and see the rows of empty showrooms that depended on the sale of new property to sell all the things that new owners and their families need. The property developers do not have the money to repay their loans or their suppliers or maintenance people or Immovable Property Tax or anybody else, including their workforces. They could get money by selling property, but that is not happening because the buyers need a mortgage or a loan and they can’t get one; the banks are not lending on collateral based on property.

    There are two ways out of this. Either the Troika have to back off and encourage lending at attractive rates to get the economy going (see the UK for example) or Cyprus can pull out of the Euro, devalue the Cyprus pound and start again. All those who feel there is joy in suffering severe pain can vote for the second one.

  8. I don’t think there’s anything to worry about economically. Positive spin from the government and glowing troika reports reflect this. That’s why there aren’t any foreign capital controls and they aren’t bankrupt……oh, hang-on……I got the last two points wrong (as minor as they are!).

  9. “Guts” has nothing to do with it.

    People, even august and venerated institutions(?), need two things to happen before they take any form of action: 1) A reason WHY and 2) A means HOW.

    As we all know, the Troika is not one institution but THREE: the European Central Bank, the European Commission and the International Monetary Fund. Each one has its own aims and agendas. By examining what they actually want to achieve, it should be easy to find out what they’ll eventually do.

    From the ECB’s own website ( The primary objective of the ECB’s monetary policy is to maintain price stability. This means maintaining the single currency and having greater influence on the economic behaviour of the diverse EU nations.

    What of the European Commission? I won’t bore you with their mealy-mouthed psycho-babble ( – even worse than mine!) but basically it’s to keep the group of nations together, acting like one country with a de facto one governmental body and a single currency.

    And our old friends the IMF? There’s the Bretton-Woods agreement (support of which was the original aim of the IMF) and all that, but it has turned into a provider of funds to dictatorships as well as a self-appointed, Slash-and-Burn adviser (“Sack everyone, reduce costs, increase taxes, pay back all your debts to the banks of the richest countries in the world, who really shouldn’t have lent it to you in the first place, with anything you have left!” OK, rant over. Sorry). Being uncontroversial for a change, we can all agree that the IMF wishes to encourage global economic stability and co-operation (notice how I said the last bit through gritted teeth?) Protecting the European single currency would seem paramount to doing that.

    Even if “beating Cyprus into shape to right wrongs and weed out corruption” – and don’t even get me started on the EU or IMF wanting to tackle corruption – were on the agenda, the only “How” would be to deny money, which would likely lead to Cyprus’ default and an endangering of the principle objective of all three institutions (to preserve the Euro) anyway.

    So, for all three bits of the Troika, the economic stability of the Eurozone (and by consequence, the single currency) is all that matters.

    Lack of action is not through lack of guts, but a complete absence of self-interest.

    One could almost believe that the principle beneficiaries of the property scam KNEW this from the outset, which is why they’ve quite unashamedly and without fear of retribution gone ahead and acted in the way they have?

    A partial transcript of a secret meeting between some of those beneficiaries, held circa 2007, has recently fallen into the hands of SoOJB. Am in the process of decoding but will hopefully make my findings known shortly…

  10. @Clive of Payia – Cyprus is effectively bankrupt – where’s the money going to come from to keep it afloat?

    As for the gas and oil, no-one knows whether there’s enough of it there to make it a commercial proposition.

  11. NPL Solution(s).

    1. Cyprus withdraws from euro zone and frees itself from the control of the troika and just lets the NPL’s roll on until the gas/oil income comes in to cover them – that is of course if the gas/oil revenue haven’t been sold already?

    2. If the Cyprus Govt. continues to prevaricate, another severe Cyprus “Haircut” with the blessing/permission from the ECB to cut below the EU Guaranteed Deposit level. This would be a “scalping”. So lets all “Bread & Breakfast” our deposit account balances into our current accounts!

    3. When Russia has completed its takeover of the Crimea and West Ukraine, they will concentrate on “protecting” the Russian-speaking population in Cyprus and sweeten it with another generous loan, going someway to eliminating the NPL. Russia will of course want berthing rights at Limassol and in the long-term elimination of the British/NATO bases.

  12. If there is such a thing as a “POLICE FORCE” Here in Cyprus. They should just Arrive at the Head Offices of all the Major Development Companies, and Solicitors and any other Company that are known Crooks, and “ARREST THEM” Handcuffed and taken away and put in Prison. End of story, Until then Nothing
    I Repeat “NOTHING” will happen in Cyprus, It is Finished.

    We need a Complete Set of Really HONEST People to sort it out.

  13. Perpetual assessment of the problem rather than dealing with it in a robust and determined manner only serves to illustrate yet again the ineptitude of those in so-called ‘authority’.

    The construction industry is crying in its beer now that the good life has gone belly up primarily due to the totally irresponsible behaviour of the developers who would love the Troika to bail out the Cyprus economy so they can repeat the whole nefarious process over again.

    The question still remains as to whether the EU will ultimately bail out its bankrupt member rather than let it exit the club and bring the whole situation to an embarrassing conclusion.

  14. They ruined Cyprus, put them in jail see how they will run to pay, as long as their is no punishment this issue will be repeated again.

    The quicker the better because time now is counter productive for restrictions and NPLs.

  15. Well Done Financial a Mirror for gnawing down to the major root of the NPL, and therefore recovery in due course of the beleaguered Cyprus Banking and hence deep economic, problems. As many suspected the bankers, lawyers and construction firms have been ‘partying’ for decades, racking up loans that not only don’t get repaid, but, in many instances it seems, don’t even get ‘serviced’, i.e. Charges and interest don’t get paid.

    In better run and better managed and controlled economies, austerity measures would include large capital projects, many of which would benefit the overall construction industries, to help re-stimulate the economy, get things ‘moving’ again. But there’s no money in the government or banks’ coffers to do this it seems in RoC because much of the lending has been extremely weak and, we also hear, large amounts of taxes have never been paid. Hence the country now lies in financial tatters and doubtless much of the ‘hot’ money has long since left the island!

    So the article’s title certainly epitomises the Dilemma: how can the Troika come up with short, medium and longer-term solutions that adequately deal with the deep ramifications of decades of greed, mis-management and fiscal and financial profligacy?

    Doubtless they will find ways of ‘massaging’ the mechanisms and associated mealy-mouthed messages that amount to an advanced form of ‘kicking the cans down the road’!!

  16. Seems like a fair assessment of the problem to me, as if we all did not know this already.

    Successive Cyprus governments have been conspiratorial in all of the problems we now face.

Comments are closed.



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