Brussels, 07/04/2015 (Agence Europe) - The European Commission has taken note of the lifting of the final measures to restrict the movement of capital in Cyprus, but seems to be focusing more on the national parliament, which has caused a further delay in the implementation of the law on property seizures, an essential condition laid down for the Cypriot bailout programme to get back on track.
On 6 April, Cyprus lifted the final measures dealing with transactions carried out externally to the island. The restrictive measures on movements of capital were introduced in 2013 to avoid a bank run following the freezing of deposits of more than €100,000 carried out in order to refloat the Bank of Cyprus.
“The Commission is aware of the steps to lift all remaining capital controls”, announced Commission spokesperson Annika Breidthardt on Tuesday 7 April, but declined to comment further. However, Breidthardt did add that as far as the Commission is concerned, and more generally, it was of “of key importance that the Cyprus programme is back on track to anchor confidence”.
The 'troika' (European Commission, ECB and IMF) broke off its mission in early February when the parliament suspended the implementation of the legislative framework on property seizures (see EUROPE 11281). The end of this episode of several months was expected on 2 April, but the national parliament pushed its vote back until after Easter and it will now take place on 16 April, according to reports in the Cypriot press. The toxic loans, which the insolvency package aims to fight, represented 53% of loans in the final quarter of 2015, representing a slight drop.
It is also worth noting that in its latest economic forecasts, the University of Cyprus anticipates a further year of recession in 2015, in the order of 0.9% of GDP. In its winter forecasts, the Commission projected low levels of growth in Cyprus, of 0.4%. (Elodie Lamer)