President of Eurogroup Jeroen Dijsselbloem and EU Commissioner responsible for Economic and Monetary Affairs and the Euro Jyrki Katainen have said that the amendments adopted by the House of Representatives on the foreclosures’ bill, which is a precondition for the disbursement of the next tranche of the island`s €10 billion financial assistance programme, are not in accordance with the Memorandum signed with the Troika and they linked the disbursement of the next tranche with the solution of this issue.
In statements after Friday`s Eurogroup meeting in Milan, Dijsselbloem said that the Troika debriefed the Eurozone Ministers of Finance on the many findings of the 5th review of Cyprus` economic adjustment programe, adding that “we welcomed and complimented the considerable progress made by the Cypriot authorities”.
“However”, he went on to say, “we understand that due to the latest amendments introduced by Parliament there is one important pending issue in the current review, it relates to the legal framework for private debt restructuring which is an essential part of the next steps to be taken”.
He called on “all domestic stakeholders to assume their responsibility and ensure that the adequate foreclosure and insolvency legislation is in place as soon as possible in line with the MoU”.
According to the President of Eurogroup, once the Troika institutions confirm that the required prior action has been successfully completed, Eurogroup can proceed with the disbursement of the next tranche.
EU Commissioner Katainen said that Cyprus “is doing a good job in a sense that it is meeting fiscal targets with a comfortable margin”.
He added that structural reforms are advancing and there is progress as regards further recapitalisation of banks.
The Commissioner said that some parts of the foreclosures legislation adopted by the House of Representatives are not compatible with the program`s requirements, adding that they wait for the Cypriot authorities to inform them on how they will proceed.
He stressed that the foreclosure reform is very essential, since, it will enalbe banks to start providing lending, which can lead to the recovery of the Cyprus economy.
Managing Director of the European Stability Mechanism, Klaus Reggling, expressed the view that 350 million euro could be allocated to Cyprus in October but pointed out that this depends on prior actions being in place as regards the foreclosures issue.
