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Cyprus

Troika due back in Cyprus November 3 for eighth evaluation

Troika representatives

A Troika delegation (IMF, EC, ECB) returns to Cyprus on November 3 for the eighth evaluation of the island`s adjustment programme which ends on March 31, 2016.

The Cyprus News Agency said the international lenders would remain on the island until November 13 and would focus on non-performing loans (NPL) as well as the strengthening of the supervisory framework for the restructuring of loans. Emphasis would also be given on the issue of the sale of loans, the implementation of structural reforms and privatisations, it said.

The troika’s return comes after the upgrading of the island`s economy by Fitch as well as the third bond issuance for the country since its international bailout in 2013. Cyprus raised €1 billion from the 10-year eurobond (EMTN) issued last Wednesday at a yield of 4.25 per cent.

IMF Spokesperson Jerry Rice said last week that as the economy was recovering and recession receding as was the ability of borrowers to service their debts.
He added that however that NPLs were a “serious problem”, and unemployment would need time and effort to overcome. But he also said the first signs of declining NPLs were already showing.

IMF Representative to the island Vincenzo Guzzo, also deemed the reduction of high NPLs a high priority, adding that that attention should not only focus on the banks` capital but also on the broader economy.

CNA said that during the eighth evaluation, the lenders would also focus on the implementation of structural reforms in order to boost growth and employment but also to secure the sustainability of the public finances. A significant issue to this end is the reform of the public administration and privatisations.

At the same time, several critical issues are still pending, including the government bills that will be discussed at the House regarding the public service reform, the autonomy of public hospitals, the implementation of the National Health Scheme, the approval by the Parliament of the bills on sale of loans as well as the privatisation of telecoms company CyTA and the unbundling of the electricity authority EAC. (CNA)

 


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