Brussels, 06/09/2013 (Agence Europe) - On Thursday 5 September, the Cypriot parliament came very close to rejecting two draft laws considered by international lenders as prerequisites for any loans to be made to the island as part of the aid plan. On Friday, the government breathed a sigh of relief and welcomed the ultimate adoption of the texts, which constitute the first stage towards the recapitalisation of the cooperatives.
Late in the day, the Cypriot parliament narrowly voted down two measures (out of 14) one on supervision of the cooperative banks and the other on recapitalisation of Hellenic Bank, then did a complete about-turn in the middle of the night and approved the texts in question by 41 votes for, out of 44. In the time between the two votes, the Cypriot finance minister was dispatched to negotiate with the MPs. The final drafts were only subject to “a few unimportant modifications”, stated a source close to the governing party, indicating that the vote had been timed badly. A delegation of six MPs were in Vilnius for an inter-parliamentary conference on defence, while another three were in Johannesburg, depriving the party of President Nicos Anastasia, of three MPs, when his majority in parliament was already small. Part of the Cypriot press gave short shrift to the revolt by the MPs, because a similar episode last March led to more drastic conditions being attached to the international aid plan. The Cypriot parliament voted unanimously to reject this aid plan as it stood in its first casting and subsequently put the island in a precarious position. Implementing all preliminary conditions will determine whether the eurozone will make payment of a €1.5 billion tranche which will be allocated to the cooperative banks.
Recession more deep-seated in second-quarter. Cypriot GDP fell by 5.9% in the second quarter of this year compared to the same period last year, revealed the Cypriot statistics office on Friday. According to AFP, that is not only the most severe recession since the mid-1970s, it is also more deep-seated than forecast by analysts, who predicted a fall in GDP of 5.4% over this period. (EL/transl.fl)