by Sarah Fenwick, Cyprus Report.com
LIMASSOL, February 9, 2015 (TSR- CP) – The Troika has kept Cyprus’ bailout programme on ice until the foreclosure bills that are pending in the House of Representatives are passed as per the conditions of the government’s 10-billion-euro deal, said the European Commission.
“Given the further suspension of the effective application of the foreclosure framework, reaching staff-level agreement on the review was not possible during this visit. The teams look forward to a timely completion of the review as soon as the conditions are in place for a positive conclusion,” says the statement.
The House of Representatives wants more protection for vulnerable borrowers and has postponed a vote on the bills until March, prompting criticism from the banking sector which is facing billions in unpaid loans. Meanwhile, House Speaker Yiannakis Omirou has proposed changes in the level of taxation on bank interest receivables and lower interest rates for borrowers.
The economy is gradually recovering and the programme has put it back on track, said Finance Minister Haris Georgiades, following his meetings with representatives of the Troika – the European Central Bank (ECB), the International Monetary Fund (IMF) and the European Commission.
But there is still a long way to go until Cyprus regains access to the usual international money markets where it would sell government bonds direct to investors like banks and other institutions. The island has made progress towards restoring its international credit profile and when it regains access to lending markets, it will no longer need the Troika, said Georgiades.
The ECB’s new monetary easing policy, in which it is buying 60 billion euros worth of EU member states’ government bonds, can help Cyprus, but there are risks from which the island must be protected, said the minister.