Cyprus Mail

Troika’s fourth review coming next month

By Staff reporter

CYPRUS’ international lenders will on May 6 commence their fourth review of the country’s economic adjustment programme, reports said last night.

A delegation of the ‘troika’ of lenders (International Monetary Fund, European Commission and European Central Bank) will be holding contacts for two weeks with Cypriot officials on issues including public finances, macroeconomic developments, financial issues and structural reforms.

According to the Cyprus News Agency, during the first week the two sides will examine issues at technocratic level, and in the second week enter discussions on a political level on the updated bailout memorandum.

On the financial sector, other than the issue of non-performing loans, the troika will assess the work done in dealing with the settlement of loans in commercial banks. Based on the memorandum, a similar evaluation will be conducted for the cooperative sector and be completed by the end of May.

In addition, the lenders will assess issues concerning the health sector, in particular the new road map for the implementation of a national health scheme.

Another item on the agenda is the preparation of a comprehensive reform framework, to be endorsed by the cabinet by end of May, establishing appropriate corporate and personal insolvency procedures. Based on that framework, legislation is to be prepared and submitted to the House of Representatives by December 2014.

Faced with a possible collapse of its banking sector, Cyprus and international creditors agreed last March a €10bn bailout that featured a haircut on uninsured deposits coupled with strict capital controls that have stunted economic growth.

To date Cyprus has undergone three programme reviews, and restrictions on transactions have been gradually eased.

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