Cyprus Finance Minister Harris Georgiades has announced the creation of a scheme to alleviate bailout losses, which amounted to €8 billion, incurred by depositors as a consequence of the bailout.
Eurogroup finance ministers have approved the Cyprus government's decision to exit its Economic Adjustment Programme and commended the Cypriot authorities for the overall successful implementation of the programme.
Cyprus is likely to successfully complete its bailout programme and receive the last tranche of international aid by the end of March, a senior euro zone official said on Wednesday.
The latest review of Cyprus' bailout programme has been successfully concluded, the EC, ECB and the IMF said in a press release yesterday, paving the way for Cyprus to take part in the ECB's quantitative easing programme.
The foreclosures hurdle must be overcome before the Cyprus adjustment programme can be brought back on track, said Eurogroup president Jeroen Dijsselbloem following a Eurogroup meeting on Monday.
The International Monetary Fund (IMF) has suspended the release of rescue money for Cyprus as "critical requirements for the completion of the fifth program review are now no longer met".
Although the foreclosures law has yet to be voted by parliament, the Cypriot authorities believe that the troika of international lenders will disburse the next tranche of the bailout on 15 December.
A vote on two bills to suspend the implementation of the repossessions legislation will probably take place after 15 December by which time Cyprus should have received the next bailout tranche.
Cyprus will not receive the next tranche the €10 billion bailout from the troika of international lenders until it complies with the MoU regarding foreclosures and insolvency legislation.
The troika has returned to Cyprus for its fourth review of the island's economic adjustment programme and has spoken with the Federation of Building Contractors about the critical issues affecting the construction sector.
Before the capital controls involving money transfers abroad are scrapped, enabling those who have sold their homes to repatriate the proceeds more easily, domestic controls will be fully eased first.
Update – 18 October. At yesterday’s Plenary session of Parliament, the majority of Cypriot MPs agreed to extend the 10 per cent discount period to those who pay their IPT by 5th November 2013.
A Cypriot MP has tabled a bill for discussion at the House Finance Committee requiring property buyers to pay Immovable Property Tax even though they do not have the Title Deeds to the property they have purchased.
The race is on to complete the revaluation of some 500,000 properties island-wide by the end of June 2014 to meet one of the bailout conditions agreed with Cyprus' international lenders last month.
A majority of Cypriot MPs have approved an amended bill to increase the rate of Immovable Property Tax, which is part of the preliminary agreement between Cyprus and its international lenders.
A bill on Immovable Property Tax, a prerequisite for the payment of the first instalment of the Cyprus bailout, is being drafted and will be placed before parliament as soon as possible.
Cyprus has avoided bankruptcy by securing a last-minute €10 billion EU bailout deal in Brussels following hours of tense negotiations; but the island will have its second largest bank closed with losses expected for big depositors.
In its worst-case scenario, where the Cyprus banking system would require €10.1 billion for its recapitalisation, PIMCO assumes a devaluation of properties by up to 65 per cent according to informed sources.
The Central Bank of Cyprus has announced that the US investment consultancy firm PIMCO has delivered its final report on the due diligence review of the Cypriot financial sector.
Following representations from hoteliers, property developers and others the government is rethinking its property tax bill which aimed to raise €180 million; €120 million more than suggested by the troika.
