Brussels, 04/11/2013 (Agence Europe) - On Monday 4 November, the troika of lenders (European Commission, European Central Bank and International Monetary Fund) began what might be its final monitoring mission in Nicosia, the Greek Cypriot capital.
The mission is assessing progress with the restructuring of the financial sector. On Friday 1 November, Hellenic Bank announced that it has acquired the €358 million euros to meet its capital requirements and avoid needing a public bailout to achieve the 9.5% of Core Tier 1 capital. The Cypriot government expects to complete restructuring of the country's banks very quickly as the lifting of capital restrictions hangs on this.
The independent group of experts on the future of Cypriot banking has published its final report. In an interview with CNBC, David Lascelles of the United Kingdom, who led the experts, said that the situation was not improving. The eurozone expected signs of recovery in the banking sector after the signing of the aid plan, but the opposite had happened, which has not led to a return of depositors' confidence in the banks, which are still leaking deposits on a daily basis despite the measures in place.
In the report, economists at the University of Cyprus calculate the cost of the crisis to the whole Cyprus economy. The report says that the crisis may well cost the economy more than twice its annual GDP by 2020. According to the academics' analysis, the loss of output, computed as the cumulative deviations of actual from potential GDP over 2012-2014 ranges from about -€8.4billion to -€5.3billion (between -56% to -35% of 2011 GDP). Over the period 2012-2020 losses lie between -€35.3billion and -€16.7billion (-233% and -110% of 2011 GDP). (EL/transl.fl)