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Program evaluation postponed

30/12/2014 07:14
Troika high-ranking officials cancelled their visit to Cyprus further intensifying the uncertainty about the program at a time when in the international arena the situation gets increasingly complicated.

In the shadow of the developments in Greece, the international creditors postponed for the time being their coming to the island due to the parliament's decision to suspend the foreclosures law.

According to a source from the ministry of finance, the creditors appear to be particularly dissatisfied with the developments in Cyprus as the government failed to implement its commitments, and so they decided to postpone their visit which was set for January 27.

Some mid-level officials from the creditors will come to Cyprus in order to perform a technocratic evaluation of the memorandum but Troika's top-level officials will not be present to evaluate its progress and the degree of its implementation.

Troika's last evaluation on Cyprus was done last June. Since then the program is in trouble due to the failure of the executive and the legislature to agree on the issue of foreclosures.

Nonetheless, the legislature does not seem to be swayed by Troika's stance.
Besides, the existing cash reserves lessen the pressure on finding a solution regarding the issue of foreclosures.

Despite Troika's dissatisfaction, opposition parties appear to be willing to postpone the foreclosures law even further.

The parliament suspended the specific law just days after Cyprus received the tranche of € 350 mil. from the European Stability Mechanism. The IMF suspended the disbursement of its tranche of €86 mil.

In order to entertain the creditors' discomfort, the president of the Republic stated that he will send the new law back to the parliament by January 8. The parliament will then have up until January 22 to either accept or reject the president's referral.

Opposition officials stated to StockWatch that they intend to further delay the foreclosures law until the insolvency law in its entirety is approved.

On his part, Finance Minister Haris Georgiades, reiterated that the foreclosures law cannot be implemented without the approval of the relevant regulations (by-laws) by the Parliament.

He also said that the specific regulations, which are necessary for the implementation of the foreclosures law will not be presented to the House before the last bill of the insolvency framework is also ready, so that the new legislation on foreclosures is applied when the House is ready to express their opinion on the insolvency bills.

"This makes the Parliament’s action to suspend the basic legislation completely unnecessary and unjustified, causing some problems”, the Minister said.

Mr. Georgiades expressed hope that a sensible way out will be found in the next few days, which will not cause additional problems to the economy of Cyprus.

"There is room," said Mr. Georgiades, "for a sensible way out, which will provide the safeguards we all want to so as for the activation of the foreclosures law to be linked to the approval of the insolvency framework in a way that will not create problems for us and the economy of Cyprus”.

The Minister appeared reassuring for the political developments in Greece.