Georgiades Urges Speedy Completion of Bank of Cyprus ResolutionJonathan Stearns
Cypriot Finance Minister Haris Georgiades said completing Bank of Cyprus Pcl’s resolution is urgent for the economy as the government seeks to qualify for more international aid payments.
The assertion puts political pressure on the independent Cypriot central bank, which is responsible for resolving the country’s biggest lender and is led by Panicos Demetriades.
“It’s the immediate top goal,” Georgiades told reporters today in Brussels. “The Bank of Cyprus needs to get out of the resolution regime without further delays.”
Cyprus in March received a 10 billion-euro ($13 billion) rescue from the euro area and the International Monetary Fund in return for forcing losses on uninsured depositors in the country’s two largest banks. Bank of Cyprus absorbed the second-biggest lender, Cyprus Popular Bank Pcl.
European officials including Jeroen Dijsselbloem, Dutch head of the group of euro-area finance ministers, have called for Bank of Cyprus to emerge from the resolution process.
“I consider that the central bank has received the same messages that the government has received,” Georgiades said. “We are in constant communication.”
The political push for Demetriades to act comes as the Cypriot government prepares for the first review later this month of progress in meeting budget-austerity conditions tied to the country’s rescue. Cyprus has already received an initial disbursement of 3 billion euros from the European Stability Mechanism, the euro area’s permanent rescue fund.
Georgiades said the government expects to receive a second payout of aid in September and a third payment near the end of the year. He said both those tranches would be smaller than the initial disbursement and the second would be bigger than the third. He wasn’t more precise.