Cyprus Mail

Troika arrives as insolvency dispute flares

By Angelos Anastasiou

AS THE government-inspired committee of experts to negotiate the insolvency framework flounders, a Troika team of financial experts and technocrats has arrived in Cyprus for policy consultations on the latest developments on the island’s most pressing financial issues.

According to state radio, the Troika delegation has started holding meetings with various stakeholders at the finance ministry on the insolvency framework, and at the Central Bank on non-performing loans and the borrowers’ registry.

The arrival of the delegation follows the release of the sixth tranche – €346 million – of a €10-billion bailout loan to Cyprus by the Eurogroup last week, after the Supreme Court deemed four House-approved bills that watered down the effectiveness of foreclosures legislation unconstitutional.

The team is slated to remain in Cyprus until November 14.

Government has pledged for the preparation of the controversial insolvency framework – a set of rules governing the treatment of solvent but illiquid borrowers in distress – to go with the hotly contested foreclosures legislation by year’s end, and asked parties to nominate a representative in an “experts’ committee” that would help negotiate its drafting.

Barring AKEL, all parties obliged, and a handful of sessions have been held, but new troubles brewed for the committee’s smooth functioning ahead of a meeting with the Troika delegation, scheduled for Thursday.

In a statement on Monday, the Green Party announced it would not attend the meeting in protest of the Central Bank’s refusal to hand over its projections, scenarios and conclusions on the draft bill.

“Unfortunately the Central Bank refused to submit the documents, which are necessary for the operation of the experts’ committee,” said the announcement.

The Greens said the Central Bank’s stance – supported by the government – “torpedoed the inter-partisan procedure and essentially leads to the disbanding of the experts’ committee.”

“We can’t possibly sit on a negotiating table on which one side (Central Bank, Troika) has all the information while the other (government, parties) is in the dark,” the Greens protested.

“There can’t be staged meetings with the cards available only to one side,” they warned.

And later on Monday, the Citizens’ Alliance – also represented on the committee – issued a statement listing the minimum requirements that the insolvency framework should meet if the party is to remain involved in the project.

Meanwhile, AKEL leader Andros Kyprianou expressed his concern over the government’s handling of the matter, arguing that Greece has had a perfectly viable insolvency framework in place for three years.

“I really wonder why both the Troika and the government have chosen to elevate an issue that, in our opinion, has insignificant repercussions on the economy but significant repercussions on the affected parties – namely the issue of foreclosures of primary residences and small-business premises – to one on which they appear uncompromising,” said Kyprianou.

“I will repeat that Greece has implemented a pertinent law for three years, based on income levels and the value of the property, and I believe that the issue could be addressed in a similar way in Cyprus,” he added.

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