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Cyprus

Co-op decision difficult, but positive for economy, EU official says

EU Commissioner Competition Margrethe Vestager

The decisions concerning the Cyprus Cooperative Bank (CCB) were difficult for Cyprus but enabled positive developments for the island’s economy, EU Commissioner for Competition Margrethe Vestager said on Friday.

Vestager, who is visiting Cyprus, met Finance Minister Harris Georgiades with whom she discussed the developments after the Commission approved the state-aid to facilitate the CCB’s market exit and the transfer of its performing operations to Hellenic Bank.

Last July the state issued bonds amounting to €3.19 billion to support the transfer of the CCB’s performing operations to Hellenic while non-performing loans amounting to €6 billion remained with the state and will be managed by a state-owned asset management company.

“When you had such a difficult process and you take important decisions that are complex and heavy on the state it is very encouraging to see how it has enabled also positive developments in the Cypriot economy,” Vestager said.

She referred to the confidence of depositors, the ratings of the Cypriot economy, the reforms in the legislation concerning foreclosures as well as the decision on the operation of the state-owned AMC without political interference.

“All of that is good outcomes after a very difficult process and heavy decisions taken by the government here,” Vestager said.

Georgiades thanked Vestager for the cooperation, support and guidance with regard to the decision taken for the CCB market exit.

“It is an issue which was difficult, it was a difficult political decision but it is a decision that works for the public interest, works for the further progress of our economy, its benefit is already visible,” he said.

Asked whether the conditions said by the Commission have been met, Vestager said the conditions for exit the bank from the market to enable Hellenic to finalise the sale have been met, noting that steps concerning the operation of the AMC have been taken.

“As far as we know we are happy with the way thing are handled here,” she concluded.

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