THE European Commission, European Central Bank and International Monetary Fund issued the following statement on their latest mission to Cyprus on 8th May 2015:
“Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) visited Nicosia during April 28 to May 8 to review Cyprus’s economic reform programme.
“Cyprus’s programme aims to support the economic recovery and job creation by restoring financial sector stability, strengthening public finances, and implementing reforms to increase long-run growth.
“The teams welcomed the authorities’ continued progress on their reform programme, including the strong improvement in the public finances and the implementation of important reforms, including the recent adoption of modern insolvency and foreclosure legislation.
“This legislation is a critical step aiming at reducing the high level of non-performing loans, which is essential to restoring growth and job creation in Cyprus. Significant progress towards staff-level agreement on the review has been made and the teams look forward to a swift conclusion as soon as all elements of the insolvency and foreclosure framework are available.”
Before the next tranche of the bailout loan is released, two actions must be completed:
- The Cyprus government has to approve the draft bills concerning the packaging and selling of loans to third parties. (The troika will examine the legislation in July.)
- The Cyprus government has to resolve the problem of ‘hidden mortgages’ where those who bought property that the developer had previously mortgaged are unable to obtain its Title Deed because the developer has defaulted. (Interior minister Socratis Hasikos has stated that the government’s top priority is to protect all those people who paid up fully for their homes, or up to 80 per cent but are unable to get the title deed. Draft legislation is being vetted by the Attorney General’s office.)
It is anticipated that the next tranche of the bailout loan will be released by the end of June; the amount will be settled once the troika have completed examining the insolvency and foreclosure frameworks.