19/02/2013 06:40
Nicosia accepted multiple messages for the content of the memorandum and the timeframes of its finalization yesterday.
Few hours after the presidential elections, the European officials declined to comment on the results but send their own messages for the next day.
ECB President Mario Draghi, was unusually sharp in his statements, stressing that it is of great importance the government to make a real commitment after the elections to finalize the memorandum.
The memorandum was agreed at technocratic level at the end of November and Cyprus adopted most of the measures.
To finalize the agreement, its creditors and shareholders are raising new issues that have to do with money laundering, commitments to privatization and the tax framework.
In relation to the content, Mr. Draghi stressed that the final version of the adjustment program should also include close supervision of the frameworks to combat tax evasion and money laundering.
"Not only there should be such legislation, but we have to ensure its implementation", he said.
Member of the European Central Bank, Jorg Asmoussen, went a step further, talking about the need to appoint foreign auditors on money laundering.
Adopting the German argument, he said that in order to approve a loan agreement, Nicosia should fulfill certain conditions and should greatly enhance transparency.
Mr. Asmoussen also noted that in order to ensure the sustainability of the Cypriot debt program, there is a need of a program of "extensive privatizations."
The Germans, however, do not seem to hurry and insist on foreign experts. The German government said yesterday that talks to resolve the economic problems of Cyprus are expected in March, the earliest.
Spokesman of the German Finance Minister said with meaning that "it depends on Cyprus and how ready the Cypriot side will be for talks”.
He urged the "third countries" to participate in talks - referring to Russia – from which they seek to extend the loan of €2,5 billion expiring in 2016.
Meanwhile, Governor of the Austrian Central Bank and member of the Board of the European Central Bank, Ewald Nowotny stated that the compliance of Cyprus with the regulations against money laundering is a “prerequisite” for the financial assistance.
Indeed, Mr. Nowotny also raised tax regime issues.
He said that many investments, even from Austria, "took the road to Cyprus for tax purposes". “Tax havens within the EU and the single market funds are two issues that are not compatible."
“Cyprus is an example for the need for a pan-European banking supervision”, he added.
After days, the issue of Cyprus returned to the international financial press. The Financial Times argues in an article of editor Tony Barber that the settlement of the Cyprus problem and the loan assistance to Cyprus must be connected. The Wall Street Journal examines various scenarios for the support of Cyprus and claims that it would be a good case to consider extreme scenarios of imposition of losses to the major creditors of the banks, which for political reasons, is unlikely.
Few hours after the presidential elections, the European officials declined to comment on the results but send their own messages for the next day.
ECB President Mario Draghi, was unusually sharp in his statements, stressing that it is of great importance the government to make a real commitment after the elections to finalize the memorandum.
The memorandum was agreed at technocratic level at the end of November and Cyprus adopted most of the measures.
To finalize the agreement, its creditors and shareholders are raising new issues that have to do with money laundering, commitments to privatization and the tax framework.
In relation to the content, Mr. Draghi stressed that the final version of the adjustment program should also include close supervision of the frameworks to combat tax evasion and money laundering.
"Not only there should be such legislation, but we have to ensure its implementation", he said.
Member of the European Central Bank, Jorg Asmoussen, went a step further, talking about the need to appoint foreign auditors on money laundering.
Adopting the German argument, he said that in order to approve a loan agreement, Nicosia should fulfill certain conditions and should greatly enhance transparency.
Mr. Asmoussen also noted that in order to ensure the sustainability of the Cypriot debt program, there is a need of a program of "extensive privatizations."
The Germans, however, do not seem to hurry and insist on foreign experts. The German government said yesterday that talks to resolve the economic problems of Cyprus are expected in March, the earliest.
Spokesman of the German Finance Minister said with meaning that "it depends on Cyprus and how ready the Cypriot side will be for talks”.
He urged the "third countries" to participate in talks - referring to Russia – from which they seek to extend the loan of €2,5 billion expiring in 2016.
Meanwhile, Governor of the Austrian Central Bank and member of the Board of the European Central Bank, Ewald Nowotny stated that the compliance of Cyprus with the regulations against money laundering is a “prerequisite” for the financial assistance.
Indeed, Mr. Nowotny also raised tax regime issues.
He said that many investments, even from Austria, "took the road to Cyprus for tax purposes". “Tax havens within the EU and the single market funds are two issues that are not compatible."
“Cyprus is an example for the need for a pan-European banking supervision”, he added.
After days, the issue of Cyprus returned to the international financial press. The Financial Times argues in an article of editor Tony Barber that the settlement of the Cyprus problem and the loan assistance to Cyprus must be connected. The Wall Street Journal examines various scenarios for the support of Cyprus and claims that it would be a good case to consider extreme scenarios of imposition of losses to the major creditors of the banks, which for political reasons, is unlikely.
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