Sunday 21 December 2014

Feeling the Pain: IMF holds back Cyprus bailout funds

International Monetary Fund says expected tranche of €88m will not be paid after parliament suspended new foreclosure law.
An anti-bailout rally in Nicosia in March 2013.
An anti-bailout rally in Nicosia in March 2013. Photograph: Yannis Behrakis/Reuters 
The International Monetary Fund has said it will not release a further €88m (£69m/US$108m) in bailout money forCyprus on Friday after the country’s parliament delayed a key foreclosure law that was due to take effect at the end of December.
“Following today’s suspension of the existing legislation on foreclosure, critical requirements for the completion of the fifth programme review are now no longer met,” the IMF said in a statement. Its board had been set to discuss Cyprus’s progress with the loan programme on Friday and was thought likely to release the next instalment of aid.
Cyprus needed an international bailout of €10bn (£7.8bn/US$12bn) from the European commission and the monetary fund in early 2013, largely due to problems in its banking sector.
The eurozone released its latest tranche of bailout loans to Cyprus in November after the government amended laws on foreclosures and on forced sales of mortgaged property in line with the conditions of the loan. The original laws would have made it easier for the country’s hobbled banks to start collecting on bad loans, which account for around half of all loans.



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