“The Eurogroup has endorsed in principle the disbursement of the next tranche of financial assistance to Cyprus,” said a statement issued after the meeting. Quarterly on-the-ground progress reviews by the troika mission to Cyprus determine the release of assistance tranches after last year’s €10 billion rescue package from the European Commission, the European Central Bank and the International Monetary Fund, with the third review having been completed successfully in February.
The Eurogroup was updated on the various aspects of the programme’s implementation, including the passing of privatisation legislation by the parliament. Following a tumultuous plenary session on February 26 that produced a surprise rejection due to unexpected abstentions by some MPs of former minor coalition partners DIKO, the House reconvened three days later and passed the same bill – containing minor changes – comfortably. The law provides the procedural framework for the privatisation of semi-governmental organisations (SGOs), considered necessary by the troika in order for the cash-strapped government to raise €1.4 billion by auctioning off stakes in power company EAC, telecoms company CyTA, and the Ports Authority to private investors.
Though the decision to privatise was part of the bailout agreement in March 2013, the recent privatisation bill caused the furious reaction of SGO employee unions, who organised several days of protest outside Parliament – where civility was tested on at least one occasion. There were also short periods of power cuts as the EAC operated only a skeleton-staff as part of their demands to safeguard full compensation and benefits in the event of privatisation.
Passing the privatisation bill had been deemed a prerequisite for the release of the fourth tranche of €150 million from the European Stability Mechanism – along with an additional €86 million contribution by the IMF – expected to be disbursed early in April. “The ESM is scheduled to disburse €150 million by the beginning of April,” the Eurogroup’s statement affirms. “Concurrently, the IMF Executive Board is expected to decide on the disbursement of €86 million,” it concludes.
Source: Cyprus Mail
