Cyprus

The Cyprus parliament on Tuesday approved a slightly amended privatization bill, meeting a condition set by international creditors for the disbursement of fresh aid to the island, The Wall Street Journal reported. The vote came just days after parliament rejected an earlier version of the bill due to a split in the former governing coalition following the departure of junior partner, the Democratic Party, or Diko, from the government. Half of Diko's deputies abstained from last week's vote, denying the government the majority it needed to pass the bill.

Cypriot President Nicos Anastasiades said all capital controls on the island would be lifted by the end of the year, a step that would remove a symbol of his country's isolation from the rest of the euro area. The controls have been in place almost a year, since Cyprus agreed to a €10-billion bailout from its European partners and the International Monetary Fund in March 2013. "The timeline is that we'll lift internal restrictions very soon, and for all other banking activities—including with abroad—by the end of the year," Mr.

The European Commission said on Monday it had found recapitalisation and restructuring aid measures in favour of the cooperative banking sector in Cyprus to be in line with EU state aid rules, Cyprus Mail reported. In a statement, the Commission said the measures would enable the cooperative banking sector to become viable in the long term without continued state support, while limiting the distortions of competition created by the aid.

Cyprus's economic restructuring programme is on target, with fiscal targets for 2013 performing better than expected, but the outlook remains challenging, international lenders said Tuesday. The assessment was made by the European Commission, European Central Bank and the International Monetary Fund after their latest review of the programme, agreed with Cyprus last March in exchange for a 10 billion euro ($13.6 billion) bailout, Global Post reported on an Agence France-Presse story.

Cyprus's economy will shrink by 7.7% this year, less than the 8.7% originally forecast, experts from the country's international creditors said in a statement Thursday, The Wall Street Journal reported. Officials from Cyprus's so-called troika of lenders—the International Monetary Fund, the European Commission and the European Central Bank—who have just completed a fact-finding mission in Nicosia, said the economic situation remains difficult.

Cyprus' president says he expects international creditors' latest review to approve the country's handling of its bailout program, the Associated Press reported. Cyprus in March got a 10 billion-euro ($13.78 billion) loan to save it from bankruptcy, but in return it had to commit to a series of reforms and measures. Among those, uninsured depositors in the country's two biggest banks were forced to take major losses on their savings. The second-largest bank, Laiki, was shut down and authorities imposed capital controls to prevent a run.

The governor of Cyprus’s central bank has come out fighting in his escalating battle with the country’s president over the alleged mismanagement of the Cypriot banking crisis and bailout. Panicos Demetriades, who heads the Central Bank of Cyprus, told the Financial Times that his dysfunctional relationship with president Nicos Anastasiades was “not a sustainable state of affairs”, but insisted he would not resign. “I don’t think that would be the right thing to do,” he said.

The Cypriot government, forced to impose capital controls as part of a 10 billion-euro ($13.6 billion) international aid program, may struggle to find a way to remove them, the country’s former finance minister said, Bloomberg reported. In March, Cyprus’s euro-area partners and the International Monetary Fund granted Cyprus the bailout in exchange for measures including a tax on bank deposits aimed at shrinking the Mediterranean island’s banking industry.

There has been no letup in the number of companies seeking debt recast with the Corporate Debt Restructuring (CDR) Cell in the July-September quarter, The Hindu Business Line reported. Tighter norms prescribed by lenders have not deterred companies from going in for CDR, as they are unable to service their debt. Weighing the companies down are slack demand, policy logjam coming in the way of project implementation and shortage of raw materials.

The International Monetary Fund has approved an 84.7 million-euro ($113 million) payout to Cyprus as part of the country's financial rescue, The New Zealand Herald reported on an Associated Press story. Cyprus' eurozone partners last week approved their part of the installment of bailout cash, amounting to 1.5 billion euros ($2 billion). They hailed the country for taking "decisive steps" to stabilize its banks, meet fiscal targets and take structural reforms.