ECB to lift Cyprus waiver for QE

Financial Mirror (Cyprus) - - FRONT PAGE -

The Gov­ern­ing Coun­cil of the Euro­pean Cen­tral Bank (ECB) de­cided to lift the waiver for Cyprus, re­gard­ing its bond­buy­ing pro­gramme, af­ter a meet­ing on March 16.

The waiver, ac­cord­ing to which Cyprus could par­tic­i­pate in the ECB’s quan­ti­ta­tive eas­ing pro­gramme with­out meet­ing the min­i­mum credit qual­ity thresh­olds, will be lifted by April 1. It had al­lowed the ECB to ac­cept Cyprus govern­ment bonds as guar­an­tees to pro­vide liq­uid­ity to the bank­ing in­sti­tu­tions. The ECB had waived the min­i­mum credit rat­ing re­quire­ment for Cyprus, but the waiver was con­di­tional on the coun­try’s be­ing in a pro­gramme. Af­ter the end of the bailout the ECB will have to stop buy­ing Cypriot govern­ment bonds.

The min­i­mum credit qual­ity thresh­olds will once again ap­ply for Cyprus from 1 April, mean­ing that Cyprus would have to re­turn to the in­vest­ment grade of in­ter­na­tional credit houses in or­der to ben­e­fit from the ECB’s quan­ti­ta­tive eas­ing pro­gramme. The sov­er­eign rat­ing are cur­rently three notches below in­vest­ment grade. Un­der the pro­gramme, the ECB has bought Cypriot govern­ment bonds amount­ing to EUR 285 mln.

The job va­cancy rate in the EU28 was 1.7% in the fourth quar­ter of 2015, up from 1.6% in the pre­vi­ous quar­ter and the fourth quar­ter of 2014. In the euro area and the EU28, the job va­cancy rate in the fourth quar­ter of 2015 was 1.2% in in­dus­try and con­struc­tion, and 2.0% in ser­vices.

Among the mem­ber states for which com­pa­ra­ble data are avail­able, the high­est job va­cancy rates in the fourth quar­ter of 2015 were recorded in Ger­many and the U.K. (both 2.6%), the Czech Re­pub­lic (2.4%) and Bel­gium (2.2%), and the low­est in Poland (0.5%), Spain and Por­tu­gal (both 0.6%).

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