Cyprus Mail
Cyprus

Anastasiades cautiously optimistic’ about troika review

CB Governor Chrystalla Georghadji

By Stefanos Evripidou

PRESIDENT NICOS Anastasiades said yesterday he was “cautiously optimistic” about the course of ongoing talks with the island’s international lenders, expected to wrap up their first review of the Cyprus bailout programme by the end of the month.

According to reports, the troika (European Commission, European Central Bank and International Monetary Fund) delegation yesterday handed to the government the first draft of the updated text of the Memorandum of Understanding (MoU), penned ahead of a €10 billion bailout agreement between the troika and government last March.

The agreement presupposed a ‘bail-in’ of the island’s two biggest banks, and the imposition of capital controls, both a first for the eurozone.

Reports suggested the draft text did not include the troika’s assessment of the financial sector, as the resolution of the Bank of Cyprus has yet to be completed, while negotiations on the €1.5 billion loan to the Cooperative Movement are ongoing.

The troika’s final review of Cyprus’ adjustment programme will be studied by the Eurogroup on September 13 when discussing approval of the second disbursement of Cyprus’ bailout funds.

The troika delegation is expected to wrap up its visit on July 31.

Asked about negotiations underway between the government and troika, Anastasiades said the final findings of the troika will be announced in the next few days.

“I do not want to prejudge anything,” he said, adding, “I am cautiously optimistic that progress so far is not negative.”

As part of the review process, the troika team yesterday met with Auditor-general Chrystalla Georghadji to discuss ways of cutting expenditure of the country’s large semi-government organisations (SGOs).

In statements to the press after the meeting, Georghadji said she had a frank discussion with the troika representatives on the Audit Office’s experience and recommendations to reduce the expenditure of large SGOs and their ability to collect money owed to them.

“A relationship of trust has been established which I feel is beneficial for both the Office and our country,” she said.

Troika representatives also met with the Consumers’ Association, telecoms authority Cyta and the Electricity Authority of Cyprus (EAC).

Speaking after the meeting, the EAC’s general manager Stelios Stylianou said the authority must re-organise and become competitive if it wanted to avoid privatisation.

He argued the EAC could remain under the umbrella of the public sector if it pushed ahead with all necessary institutional and organisational changes.

“Given the evolution of the energy sector, in the future the EAC must be competitive as far as production and supply are concerned and have a monopoly on transmission and distribution” of electricity.

He added that the international lenders “seemed satisfied with the changes” the Authority is planning in order to become more competitive and efficient.

“With the necessary institutional and organisational changes, the EAC can remain a public organisation without necessarily proceeding to privatisation,” he said.

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