NICOSIA - Cyprus will not require any additional measures in relation to its bailout agreement in 2014, Troika officials have estimated.
International lenders, who met with the House Finance Committee behind closed doors on Thursday, said that the economy will contract 4.7% in 2014 and but begin a fledgling recovery of 1% next year. And no additional measures will be necessary, Diko MP and deputy chairman of the committee Angelos Votsis said.
The Troika is also expecting the third evaluation of the implementation of the adjustment programme in Cyprus to be positive and are favourable towards creating a safety net for non-performing loans, while at the same time protecting first homes.
Votsis said that the lenders feel the privatisation of semi-government organisations CyTA, the Electricity Authority and the Ports are necessary in order to increase revenue and efficiency, while at the same time contribute to attracting investors.
Martin Hervé from the European Commission said that Cyprus has two positive evaluations and that important decisions were made to restructure the banking system, which have been noted by the Eurogroup and the rating agencies.
Hervé revealed that during a think tank in Lisbon, Cyprus was characterised as the fastest developing country among those which implemented a memorandum, contributing to regaining the partners’ confidence in the island.
In terms of the privatisations, the EC representative said that it is a very sensitive political issue but at the same time a vital part of the adjustment programme, as denationalisation will help resolve the country’s liquidity problem by attracting investments.
Delia Velculescu of the International Monetary Fund (IMF) said Cyprus has succeeded in reinforcing the trust of the international community both in terms of implementing the bailout as well as regarding its financial results.
Last March Cyprus was facing an enormous challenge and many doubted whether the country could bounce back, but progress has been made since then, Velculescu said.
She noted however the need to restore development to cover the budgetary gap while at the same time protecting vulnerable groups.