Cyprus Mail

Reported deal with troika over SGOs

The Central Bank reportedly been spared from selling the country's gold reserves

By Elias Hazou

BANKS’ DELINQUENT loans and the privatisation of state-owned enterprises were the top items on the agenda of talks on Monday between the government and the ‘troika’ of international creditors.

The troika heads of mission in Cyprus met with Finance Minister Harris Georgiades and Central Bank chief Panicos Demetriades. During the meeting, which kicked off in the morning and lasted until the afternoon, the comments and observations of the international lenders included in the updated Memorandum of Understanding were discussed.

A draft of the updated MoU had been handed over to the government over the weekend.

The top-level negotiations were expected to continue today. The troika mission, in Cyprus for its third review of Cyprus’ economic adjustment programme, is due to leave the island tomorrow.

Public broadcaster CyBC reported that a deal has been struck on the broad strokes of the programme for denationalising certain state-owned enterprises.

The privatisation plan is aimed at raising at least €1bn billion by the end of the programme period (2016) and an additional €400m by 2018 at the latest.

The government will use the cash to pay down a €10bn rescue package, agreed last March to bailout the bankrupt state.

The finishing touches are being placed on privatisation-related legislation, which will be presented to the Cabinet today or tomorrow for approval and then forwarded to parliament, the same report said.

Online news portal Stockwatch reported meanwhile that an agreement is imminent on managing banks’ non-performing loans (NPLs) in relation to mortgage debt.

The troika insists on legislation allowing for foreclosures and private auctions of property being passed by the end of April.

Foreclosure actions by banks would begin 18 months after passage of the legislation, but foreclosures of primary residences would be given a greater grace period, of 30 months.

NPLs – an open sore in the banks’ balance sheets that could sap their equity unless loans are not recovered – stand at a staggering €24bn, recently released data has shown.

Around €10bn of this debt concerns household loans, of which €3.2bn is held in thousands of owner-occupied dwellings.

The data also reveals that around a third of debt linked to owner-occupied dwellings is not being properly serviced.

Citing its sources, Stockwatch reported also on an agreement sparing the Central Bank from selling its gold reserves (worth around €400m) to finance the bailout. The Central Bank had been against giving up its gold cache.

Instead, the Central Bank would pay the government around €200m initially out of its profits, and the rest at a later date. By law, the Central Bank must each year relinquish to the state 80 per cent of its profits.

Related Posts

Property developers scramble to meet demand as Limassol leads the way

Kyriacos Nicolaou

Cyprus Business Now

Kyriacos Nicolaou

Shelters for Paphos mosaics a step closer

Anna Savva

Government response to ‘spy van’ affair is ‘unsatisfactory’

Elias Hazou

Huge bill discrepancies forces EAC to issue advice to consumers (Updated)

Jonathan Shkurko

Police rescue girl aged 8 whose inflatable boat was swept out to sea

Elias Hazou


Comments are closed.