Brussels, 16/05/2014 (Agence Europe) - The troika of lenders (European Commission, European Central Bank and International Monetary Fund) is expected to leave the Cypriot capital this weekend after making a positive assessment of implementation of the country's structural adjustment programme and budget plans.
Macroeconomic developments are expected to be better than forecast. On Thursday, the EU's statistical office, Eurostat, revealed that the recession in the first quarter of 2014 was not as bad as forecast, with GDP falling by 0.7% (see EUROPE 11080).
As we went to press on Friday 16 May, the troika and the Cypriot government were concluding talks on the bank sector, but still discussing budget and structural reforms. The Cypriot Press Agency says three prior actions have been laid down as preconditions for payment of the next batch of aid: adoption regulations on the Fiscal Council, approval of a bill on the composition of the Resolution Authority; and submission of a report on money-laundering to the OECD by the end of May. The troika focused on the high proportion of non-performing loans on Cypriot bank balances. The final version of the memorandum of understanding says that work on insolvency regulations must be completed by July. (EL)