A Troika delegation, comprising representatives of the IMF, the European Central Bank and the European Commission, leaves Cyprus today after more than ten days of negotiations on the terms of a bail out.
Yesterday the government negotiating team and Troika representatives met and also had a working dinner to discuss thorny issues relating to pensions, the privatization of semi-governmental organizations, the cost of living allowance (COLA) and natural gas issues.
According to CNA sources, the government negotiating team has secured that salary increases – and not just the consumer price index - will be taken into consideration in calculating the increase in pensions.
A Troika delegation, comprising representatives of the IMF, the European Central Bank and the European Commission, leaves Cyprus today after more than ten days of negotiations on the terms of a bail out. Yesterday the government negotiating team and Troika representatives met and also had a working dinner to discuss thorny issues relating to pensions, the privatization of semi-governmental organizations, the cost of living allowance (COLA) and natural gas issues. According to CNA sources, the government negotiating team has secured that salary increases – and not just the consumer price index - will be taken into consideration in calculating the increase in pensions. This, according to the same sources, is considered an important agreement as it will help increase low pensions.
On the negotiating process, the same sources have said that it is now clear what each side is seeking to secure from the other. However the issues with regard to natural gas, COLA and the privatization of semi-governmental organizations remain pending. The meeting was attended on behalf of the government by Finance Minister Vasos Shiarly, Government Spokesman Stephanos Stephanou, Ministry of Finance Permanent Secretary Christos Patsalides and two other Finance Ministry high-ranking officials. After Troika’s departure, long distance negotiations will take place with a view to achieve an agreement and decide on a return visit by the Troika to conclude the negotiations. On Wednesday a meeting took place between Cyprus President Demetris Christofias with the leaders of the political parties on the course of negotiations with Cyprus’ international lenders.
In statements after the meeting, Government Spokesman said that after long and tough negotiations with the Troika, convergences had been achieved on some issues, noting, however, there are still some disagreements on some important issues. The objective, he said, is to reach an agreement on a bailout programme for Cyprus.
The Troika delegation argues that revenue from natural gas exploitation in Cyprus’ exclusive economic zone must go towards debt repayment.
The government maintains that this revenue must be deposited in a special fund, part of which will be allocated to growth and infrastructure projects, another part will be destined for future generations and another part will go towards repayment of the country’s debt to its international lenders. On the semi-government organizations, the Troika seeks to privatize those organizations which make a profit.
The government disagrees with such a prospect and has drafted a plan to privatize non- profit making semi government organizations. Other thorny issues under discussion between the Troika and the government relate to the cost of living allowance (COLA), with the former demanding a three year freeze and the latter proposing allocation of the allowance once a year, instead of twice which applies now, and withholding COLA if the economy is in recession.
