AKEL is expected to vote against the bill after the government rejected an amendment it proposed which would exclude loans below €350,000 from the provisions of the law, while other parties may propose other amendments, the finance committee’s vice chairman and DIKO deputy Angelos Votsis said.
A source with knowledge of the situation, who spoke on Monday on condition of anonymity citing the confidentiality of talks, said that international creditors may link the disbursement of Cyprus’s penultimate tranche of up to €500m to the approval of legislation allowing the sale and securitisation of loans, as well as tangible progress on the privatisation of the Cyprus Telecommunications Authority, widely known as CyTA.
In addition, the troika said that they want to see more concrete steps towards the implementation of public service reform, the source added.
The troika of the European Commission, the European Central Bank and the International Monetary Fund, which met with finance minister Harris Georgiades and Central Bank of Cyprus’s governor Chrystalla Georghadji, gave Cyprus a deadline until the end of October to pass the law on the sale of loans and December 31 deadline to pass the loan-securitisation law. Both legislations are considered key in helping banks reduce their non-performing loans. Cyprus has also failed to pass legislation corporatizing CyTA by turning it into a limited liability company by October, ahead of its privatisation.
Cyprus, which is about to exit its cash-for-reforms programme in March, issued a €1bn 10-year bond at a 4.25% average yield on October 27. The government, which wants to undertake a clean exit from the programme, i.e. without requesting a credit line, will use €550m of the funds tapped from the issue as a cash reserve.
Finance minister Georgiades is expected to meet again the troika delegation after he returns from a euro area finance ministers’ meeting which starts in Brussels today, the source added.
Votsis, the parliament’s financial committee vice-chairman, also said that the government agreed to include in the draft law on the sale of loans a provision which will allow the establishment of a private as well as public-funded asset management body which will buy non-performing loans from banks, the Cyprus News Agency reported.
Source: Cyprus Mail
