By Stelios Orphanides
Finance minister Harris Georgiades said that he asked the parliament to speed up the debate on reform bills pending for months and complete the procedure before the next parliamentary elections, the Cyprus News Agency reported on Wednesday.
Georgiades said that government is awaiting the parliament’s decision on the draft legislation on the incorporation of CYTA Ltd, one of the requirements for the disbursement of the last bailout tranche by Cyprus’s international creditors, and several other draft bills on the reform of the civil service, state-owned companies and local administration, which the government passed months ago, the agency reported.
Georgiades conveyed his request to the parliament with a letter to speaker Yiannakis Omirou.
The Cypriot government is also making efforts to have the completion of Cyprus’s eighth adjustment programme review included on the International Monetary Fund’s agenda, which will allow the disbursement of a €125m tranche, regardless of the delays in taking prior action required by creditors, the finance minister said.
IMF decision-taking procedures are more expeditious than those of euro area institutions as the latter require decisions by the euro working group and certain national parliaments before the European Stability Mechanism receives authorisation for the disbursement of a tranche, the minister said according to the Cyprus News Agency.
As requirements for the disbursement of the final bailout tranche worth €400m, Cyprus’s creditors included in addition to the CYTA bill, also a cabinet decision on the separation of the production and transmission operations of state-owned power company Electricity Authority of Cyprus and the passing of the draft bill on the securitisation of loans. Opposition parties, including DIKO on which the government relied since 2013 to pass legislation included in Cyprus’s cash-for-reforms programme, signalled they would reject the CYTA bill, which would have been a step towards the privatisation of the company.
The finance minister reiterated the government’s intention to seek a clean exit from the programme expiring in March, saying that he does not favour its extension for the sake of remaining eligible for the European Central Bank’s expanded asset purchase programme, widely known as quantitative easing, which requires an investment-grade sovereign rating or, in its absence, a successful completion of a programme review. An exclusion of Cyprus from the ECB programme will not considerably affect yields of Cypriot government bonds.
Cyprus is rated non-investment grade by all three major rating companies. Fitch Ratings and Moody’s Investors Service assigned Cyprus a B+ and B1 long-term rating respectively which is four notches below the investment grade. The rating by Standard & Poor’s is BB- which is the third highest speculative rating grade.
Georgiades also said that the government is considering to test markets towards the end of the year in an attempt to make debt maturities in 2020 more manageable, without revealing further details.