CCB President Nicolas Hadjiyiannis addressed the troika’s Cyprus mission at the finance ministry, updating them on the progress of consolidation and restructuring of Co-ops. Hadjiyiannis said that the single greatest challenge facing the entire banking system are NPLs, and that the rise in numbers is expected to continue. “The issue of NPLs is what the stabilisation and recovery of the Co-ops depends on”, he said.

While in 2013 the rate of increase in NPLs was in the single digits, Hadjiyiannis said certain provisions of the directive issued to financial institutions by the Central Bank of Cyprus maintain some loans in the ‘non-performing’ category after they have been restructured. “In terms of time, we could say that a levelling off and decrease in numbers of NPLs will be in the next two years,” he said. The heads of the troika’s Cyprus mission were on the island as part of the continuing third review of progress on the country’s adjustment programme, and met the Resolution Authority and now-defunct Laiki Bank’s Special Administrator Andri Antoniades.

The Resolution Authority – comprising the finance minister Harris Georgiades, the Governor of the Central Bank of Cyprus (CBC) Panicos Demetriades and the President of the Cyprus Securities and Exchange Commission (CySEC) Demetra Kalogirou – and the troika delegation were presented with the road-map for selling off the bank’s assets, which include several subsidiaries abroad. Antoniades also provided a progress update on the issue of an international house assuming the voting rights held by former Laiki Bank in the Bank of Cyprus – to the tune of 18%.

Troika officials arrived on the island to perform a 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. The Troika officials also looked at the issue of closed professions, that it said needed to be opened up urgently for all EU citizens.

Speech-therapists, psychologists and hairdressers are included in the list of professions considered closed, all of which require approval of individuals by the competent professional body in order to qualify for employment. According to the troika, standards for employment in these fields are set unnecessarily high, making eligibility near-impossible, and cited the example of psychologists from Greece who find it exceedingly hard to obtain a licence to practice in Cyprus even though they are qualified and speak the language, due to the regulations governing employment eligibility.

In a separate meeting the roadmap for the implementation of the national health system (NHS) was presented to troika members by high-ranking representatives from the health ministry, headed by permanent secretary Christodoulos Kaisis. All the requirements of the revised memorandum (MoU) were analysed, including the reorganisation of public healthcare facilities, administrative restructuring and the introduction of a computerised system. While no issue of extending the timeframes has been raised, the health ministry raised the question of whether existing timelines are feasible, given the activities to be carried out. The troika delegation was also updated on the ministry’s consultations with the Health Insurance Organisation regarding certain financial aspects of NHS based on consulting firm Mercer’s actuarial study, aimed at reducing operational cost of public healthcare facilities. Conceding troika’s argument on the need for urgent implementation of a NHS as Cyprus is the only EU country without one, the government argued that implementing one should be a gradual process to avoid straining public finances in the short-term.

Source: Cyprus Mail