Troika back in Cyprus on Tuesday for evaluation
A Troika delegation (IMF, EC, ECB) returns to Cyprus on Tuesday for the eighth evaluation of the island’s adjustment programme, which ends on March 31, 2016.
The international lenders will stay in Cyprus until the 13 November and will focus on NPLs as well as the strengthening of the supervisory framework for the restructuring of loans, CNA reported. Emphasis will also be given to the issue of the sale of loans, the implementation of structural reforms and privatisations.
Troika returns to Cyprus following 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.
Furthermore, IMF Spokesperson Jerry Rice said last week that as the economy recovers and recession recedes, so is the ability of borrowers strengthened to service their debts.
He added that although NPLs are a “serious problem”, unemployment also requires time and systematic effort to circumvent. But he also pointed out that the first signs of decline of NPLs are already showing.
IMF Representative to the island Vincenzo Guzzo deemed the reduction of high NPLs as a high priority, adding that that attention should not only focus on the banks’ capital but also on the broader economy.
Sources told CNA, during the eighth evaluation, the lenders will 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 privatisation.
At the same time, several critical issues are still pending, including the government bills that will be discussed at the Cyprus 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 CyTA and separation of EAC activities.
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