25 June 2013 22:22

 NICOSIA - With the Troika due for an initial assessment next month, Cyprus appears to have fallen behind in the implementation of the bailout agreement, the financial web site Stockwatch reported yesterday.
It said that basic bills on the financial sector have not yet been drafted and it remains unknown to what extent fiscal targets have been met.
The required reforms are not moving ahead as initially anticipated, it added.
A major delay is noted in transferring responsibility over co-ops to the Central Bank.
Ending the double monitoring of Cyprus’ banking system was one of the main issues raised by lenders.
They wanted supervisory responsibility transferred to the Central Bank and a change in the role of the co-op banks’ commissioner.
The change was due to take place May but the bill is still pending.
There is also a delay in evaluating the assets of the Bank of Cyprus (BoC) which should have been completed by the end of June but is now expected just before the advent of the Troika.
The Central Bank (CB) has assured that it will speed up the required procedures so that BoC will exit the resolution regime in two instead of eight weeks.
It is also unknown to what extent fiscal targets have been met.
Cyprus recorded a surplus for the first four months of 2013 while the target was to have a manageable deficit of €222m until June.
The achievement of fiscal goals will partly depend on the way extraordinary income from the second round of licensing of the EEZ at the start of the year will be used.
Reform delays include failure to separate pensions based on contributions from those that are not while an actuarial study should be completed by the end of June.
Cyprus should have also announced the advantages and disadvantages of a National Health Scheme (NHS) in the first half of 2013 and they should have been discussed by Parliament with specific proposals for its implementation.
A fiscal council with specific terms of reference and an operations framework should have been set up in the first six months of 2013 also.
According to the bailout agreement, the assets of semi-government organisations should have been evaluated in the first six months of the year.
But the Interior Ministry did not ask semi-government organisations and local authorities to prepare a list of their properties until last week.
The government should have also come up with a plan for reforming the social welfare benefits system by June.
Authorities should have announced specific regulations for implementing the directive on services covering the aspects of the entrance and operation of foreign service firms in Cyprus.
The Troika is expected to evaluate Cyprus’ adjustment programme in the second half of July and its remarks will go before the Eurogroup in September.


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