Cyprus Mail

How many co-ops will be left standing?

INTERNATIONAL LENDERS will hold a third meeting with the leadership of the cooperative movement today in an effort to reach agreement on how many co-ops will be left standing after its restructuring plan is implemented.

Representatives of the troika met with the leadership of the Central Cooperative Bank (CCB) yesterday for a second time since the troika arrived on the island last week to review implementation of the terms of its €10 billion bailout, which pulled the cash-starved country away from the brink of financial meltdown.

According to the terms of the bailout, cooperatives must drastically shrink in number, mainly through mergers while the Central Bank of Cyprus will also have a role in their supervision.

Reports differ on the final number of coops that will remain after restructuring from the 90-odd co-ops around today, with talk of anywhere between five and 22 mentioned in the press.

Around 150 branches are also expected to close down, leaving approximately 250.

Outgoing CCB general manager Erotokritos Chlorakiotis said yesterday the troika appeared to understand the need for at least 18 coops to remain in operation.

“The number 18 is the minimum that must come out of the final mergers we will carry out.”

He said the CCB was putting a freeze on its early retirement plan until the final restructuring plan is ready by the end of September, adding that the hope was the restructuring will minimise the risk of mass layoffs.

No official comments were made after yesterday’s meeting, though sources told the Cyprus Mail last night that another meeting has been scheduled for today to discuss the final figure.

Cooperatives will need around €1.5 billion to close a capital shortfall in the next couple of years, with the cash coming from the bailout, meaning, unlike the case of Laiki and Bank of Cyprus, taxpayers will foot the bill for the coops’ recapitalisation.

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