FURTHER signs emerged yesterday that Bank of Cyprus (BoC) has been reduced to a hapless hostage caught in crossfire between the government camp and the banking regulator.A legislative proposal spearheaded by DISY envisages increasing the number of board members at the Central Bank of Cyprus (CBC) from five to seven, two of whom will act as executive directors.The bill is co-sponsored by DISY’s Averof Neophytou, DIKO’s Nicholas Papadopoulos, the Greens’ George Perdikis and the European Party’s Demetris Syllouris.The point of contention is a clause stipulating that, though final decisions rest with the governor of the CBC, the latter must have the consent of the board’s majority... 7 comments

A TEAM of troika technocrats arrived in Cyprus yesterday to monitor developments in the island’s financial sector.The troika contacts will begin tomorrow with meetings with finance ministry officials, the Central Bank and management of commercial banks. The troika delegation departs on Saturday.The technocrats are on an “interim mission” to screen developments in the local banking sector. It’s understood they will be looking at steps taken so far to recapitalise the island’s largest lender Bank of Cyprus through a haircut on deposits.Cyprus has struck a deal with the troika to receive a €10bn bailout after bailing in bank uninsured deposits in a bid to recapitalise the island’s troubled banks... 10 comments

THE GOVERNMENT and parliamentary parties agreed on the need to exit the bailout programme as soon as possible yesterday though showed little sign of consensus on how to do so exactly. Speaking after a lengthy session of the National Council, a body initially set up to advise the President on the Cyprus problem, government spokesman Christos Stylianides said the main focus of yesterday’s meeting was the economic situation. Members were also briefed on Foreign Minister Ioannis Kasoulides’ recent contacts in relation to the Cyprus problem.   Those present confirmed that the priority right now was the handling of the economic crisis, though this did not mean the Cyprus problem was being relegated to second place, said Stylianides. ... 9 comments

THE EUROGROUP gave its blessings to the disbursement of €3 billion to Cyprus yesterday, with the first €2 billion already sent to the island as part of the first tranche of a €10 billion bailout expected to “buy time” for its ailing economy. The group of eurozone finance ministers met for nearly six hours in Brussels yesterday, discussing among other things the bailout programmes of Cyprus and Greece and the troika’s assessment of Cyprus’ anti-money laundering measures. During the first hour of the Eurogroup meeting, the European Stability Mechanism (ESM) board announced its approval of the Financial Assistance Facility Agreement with Cyprus and the disbursement of the first tranche of ‘rescue’ money worth €3 billion... 12 comments

Russia has agreed to extended the maturity and reduce the interest on its loan to Cyprus, a document prepared by international lenders showed, providing additional but expected financial relief to the island on top of an EU-IMF bailout... 5 comments

May Day, Mayday, or can you feel the blah tonight?

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 PARLIAMENT last night ratified the island’s EU bailout amid warnings that tougher times lie ahead for Cypriots, already suffering from the effects of a deep recession.With a thin majority of just two votes, lawmakers approved terms accompanying €10 billion in aid from the European Union and the International Monetary Fund (IMF).In a show of hands, 29 MPs – DISY, DIKO, and EVROKO -- the three parties in the government approved the motion, with 27 – AKEL, EDEK, Greens and two others -- voting against.Government officials had warned the island would fall into chaotic default, unable to pay salaries or pensions, as early as next month without emergency funding... 16 comments

 AS PARLIAMENT met to ratify the terms of Cyprus’ bailout a crowd of people protested, saying it was the harbinger of unfair austerity. “We know where this policy will take us. It will damage labour relations and will annihilate the meaning of democracy,” said 43-year-old Nicos Trimikliniotis, who is part of an anti-austerity and anti-privatisations platform. ... 17 comments

 CURRENT discussions on whether Cyprus should exit the eurozone are misplaced, and one proposal in particular is ‘dangerous’ in that it confuses the arguments and uses suspect data,  economists said yesterday.The proposal  is based on a shaky methodology or plain wrong facts, said the group of 23 economists who felt they needed to set the record straight.The anonymous proposal entitled: ‘Estimating the impact of the troika’s solution on Cyprus: assessments and a superior alternative scenario’ had been given to the President and legislators through a think tank. It urged MPs to vote down the bailout deal yesterday, claiming that negotiating a eurozone exit was a better alternative... 11 comments

Parliament approved on Tuesday an EU bailout including provisions to impose substantial losses on bank depositors and wind down one of the... 17 comments