NICOSIA - The Troika mission continued Thursday its contacts at the Finance Ministry, in Nicosia, in the framework of the first assessment of the implementation of Cyprus’ adjustment programme.
According to CNA information, the separate meetings held until Thursday noon by the various groups of the Troika mission focused on the full implementation of the European directive for services, the legislation for “closed off” professions and public finances.
In a meeting that started at 12 o’clock, the discussion focused on competition and budgetary issues, as well as on macroeconomic forecasts.
Later on, the subject of tourism is expected to be discussed, with the participation of technocrats from the Ministries of Finance, Communications and Works and Energy. Another Troika group of technocrats is expected to meet with the Hellenic Bank’s Department of Financial Studies.
Moreover, the Troika met this morning with the leadership of the Cooperative Banks to discuss restructuring and recapitalization issues.
The Central Bank of Cyprus (CBC) has already announced that capital needs for Cooperatives, including the Central Cooperative Bank, are estimated at no more than 1.5 bln Euros, which will be covered by the adjustment program.
Internal restructuring plans of Cooperative institutions need to be finalized by September 2013, in order to be submitted to the European Commission. Sources told CNA that a group of technocrats from KPMG London arrived for this purpose in Cyprus. They are expected to meet with the Central Bank and the Troika, to discuss the assumptions contained in the various scenarios the audit firm is working through, in order to finalize its valuation of Bank of Cyprus assets.
The meeting is expected to take place at the Central Bank, with the Finance Minister Harris Georgiades attending. Valuation of assets scenarios concern bank loans, government bonds, investments and other issues. According to CNA sources, Troika, CBC and Finance Ministry representatives will have before them KPMG’s interim report this Saturday.
The final report is expected by July 22, in order to start evaluating the additional haircut percentage to be imposed on uninsured depositors. Deposits with more than 100,000 Euros lost 37.5% of their value, after being converted into bank shares. Losses could go up to an additional 22.5%, depending on the final assessment of bank needs. The goal is to meet the 9% Core Tier 1 ration, during a stress test.