Troika says NPLs is still the num­ber one pri­or­ity, must “speed up re­forms”

Financial Mirror (Cyprus) - - FRONT PAGE -

In­creas­ing the pace of re­form will be es­sen­tial for the is­land’s eco­nomic ad­just­ment pro­gramme, the Troika of in­ter­na­tional lenders said in a joint state­ment on Mon­day, adding that ad­dress­ing the high level of non-per­form­ing loans held by banks is the num­ber one pri­or­ity. Staff teams from the In­ter­na­tional Mon­e­tary Fund, the Euro­pean Com­mis­sion and the Euro­pean Cen­tral Bank con­cluded their sev­enth re­view of EUR 10 bln bailout pro­gramme that started in March 2013. The gov­ern­ment is op­ti­mistic it will con­clude the pro­gramme by March next year and will prob­a­bly not utilise all of the funds al­lo­cated.

“Cyprus’s pro­gramme, which is sup­ported by fi­nan­cial as­sis­tance from the Euro­pean Sta­bil­ity Mech­a­nism (ESM) and the IMF, aims to pro­mote eco­nomic re­cov­ery and job cre­ation by restor­ing fi­nan­cial sec­tor sta­bil­ity, strength­en­ing the public fi­nances, and im­ple­ment­ing re­forms to in­crease long-run growth,” the joint state­ment said.

Ac­cord­ing to the lenders, “the teams have reached staff-level agree­ment on poli­cies that could serve as a ba­sis for com­ple­tion of the re­view, re­flect­ing the progress and poli­cies un­der the pro­gram”.

They said that “the fi­nan­cial sit­u­a­tion of the banks is grad­u­ally im­prov­ing, and there is ten­ta­tive ev­i­dence that the slow pace of debt restruc­tur­ing is pick­ing up. The fis­cal tar­gets in the first half of 2015 were met with sub­stan­tial mar­gins. In ad­di­tion, the author­i­ties are mak­ing progress on their struc­tural re­form agenda”.

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