Top officials of the troika’s Cyprus mission arrived on the island to perform its third review of the country’s adjustment programme, agreed to with the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF) – collectively, the troika – in exchange for a €10 billion bailout loan in March 2013. Headed by IMF mission chief Delia Velculescu, the troika delegation held a kick-off meeting with Finance Minister Harris Georgiades when they were briefed on a number of issues, including the progress of the roadmap for privatisations. Exceeding two hours in length, the meeting with Georgiades was described as “comprehensive” and took place in a “positive climate”.

During the session, the troika delegation was briefed on a small delay in preparing and implementing the legal framework on the privatisation of SGOs, and is reported to have looked favourably on the government’s request to push the deadline back from the end of January to mid-February, deeming the two-week hold-up “not a problem”. In order to raise a budgeted €1.4 billion in revenue by 2018, the troika-mandated privatisation of SGOs is designed to auction off stakes in the telecoms company (CyTA), the electricity authority (EAC), the ports authority (CPA), and several others, to private investors.

The latest developments in the consolidation of co-operative financial institutions were also discussed, inlight of last week’s successful submission of the co-ops’ restructuring plan to the EU’s Competition Commission. The co-ops, poised to receive a €1.5 billion capital injection from the troika bailout money in March, need to be merged into 18 institutions – down from 93 pre-consolidation – and restructured before the tranche can be released. However, a legal tangle concerning one of the co-ops risks derailing the timeframe and has had the troika wondering whether the funds should be released at the end of March as originally planned, or upon completion of the consolidation process. This prompted the Finance Ministry to fast-track the introduction to the House of a bill simplifying procedures and facilitating the completion of the consolidation process by March end, irrespective of pending court decisions.

Georgiades also updated the troika delegation of the planned overhaul in the public welfare system, focusing on the introduction of the Minimum Guaranteed Income programme, which is set to come into effect in July this year. Other items on the troika delegation’s agenda included the ongoing effort to restructure the public service, and the prospects of lifting restrictions on capital flow. Further consultations held with the troika at a lower level addressed the need to fight undeclared labour, with the labour ministry considering adopting a computerised system that would enable it to monitor employment in real time and record personnel information, and time worked, in order to identify instances of illegal employment. Government deputy spokesman Victoras Papadopoulos expressed confidence in achieving a problem-free review. “Deliberations have started and we hope to once again pass the review successfully. Our assessment thus far, and hopefully that of the troika as well, suggests that no problems will arise,” he said.

Later the troika delegation met with the  Employers and Industrialists Federation and the Cyprus Chamber of Commerce and Industry. The heads of the organizations told the press that during the meeting they pointed out the need for the banking system to further stabilise so that additional liquidity can flow into the market.

Source: Cyprus Mail