Troika team ar­rives, 350m tranche by De­cem­ber

Financial Mirror (Cyprus) - - FRONT PAGE -

A new team of tech­nocrats from the Troika of in­ter­na­tional lenders ar­rived on Mon­day to pre­pare the ground for the next re­view of the is­land’s eco­nomic adjustment pro­gramme some time in early Jan­uary.

Al­ready, the Eurogroup of Eu­ro­zone fi­nance min­is­ters has ap­proved the next tranche of 350 mln euros in bailout money that had been de­layed with the par­lia­ment’s decision to chal­lenge the set of bills on mort­gage fore­clo­sures.

The de­lay, that con­cluded with the Supreme Court say­ing the par­lia­ment’s in­ter­jec­tion had been un­law­ful, brought the Cyprus gov­ern­ment closer to bank­ruptcy as the fore­clo­sures bills, aimed to im­prove debt col­lec­tion by the banks, was a con­di­tional ‘prior ac­tion’ to se­cure the next pack­age of the 10 bln bailout money.

The IMF Ex­ec­u­tive Board is also ex­pected to ap­prove its con­tri­bu­tion of about 85 mln euros, thus rais­ing the funds, ex­pected to ar­rive on the is­land in early De­cem­ber, to 435 mln euros.

Now that the fore­clo­sures fra­cas is out of the way, the Troika will fo­cus on other re­forms and re­struc­tur­ing is­sues, such as the cre­ation of a na­tional health sys­tem (NHS) that should be­gin im­ple­men­ta­tion in mid-2015 to im­prove merg­ing of ser­vices in the pub­lic sec­tor, bet­ter use of ser­vices from the pri­vate sec­tor, low­er­ing the cost of medicines and mak­ing health­care more ac­ces­si­ble to the vul­ner­a­ble groups of so­ci­ety.

Other is­sues on the agenda are progress on the pri­vati­sa­tion of gov­ern­ment as­sets and ser­vices, a re­view of the fi­nan­cial sec­tor by the Cen­tral Bank in or­der to lift all re­main­ing ob­sta­cles on cap­i­tal move­ment, while keep­ing a watchful eye on other is­sues that could de­rail the adjustment pro­gramme, that would ul­ti­mately freeze the bailout plan.

Fi­nally, with the bank stress tests sug­gest­ing that the four sys­temic banks on the is­land – Bank of Cyprus, Hel­lenic, Co­op­er­a­tive, RCB – have enough cap­i­tal with with­stand fur­ther shocks with­out gov­ern­ment as­sis­tance, the Min­istry of Fi­nance may con­sider re­sort­ing to in­ter­na­tional mar­kets for fund­ing yet again.

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