Gold Magazine January - February 2014, Issue 34 | Page 42

european parliament

European
Parliament

Draft Report
Slams Troika

O

n Cyprus, rapporteurs Othmar Karas (Austria) and,
Liem Hoang Ngoc (France)
note that “at the beginning
of the EU-IMF assistance
programme in 2013, speculations about the
systemic instability in the Cypriot economy
had been ongoing for a long time, owing
inter alia to the exposure of Cypriot banks
to overleveraged local property companies,
the Greek debt crisis, the downgrading of
Cypriot government bonds by international rating agencies, the inability to refund
public expenditure from the international
markets, and the initial reluctance of the

government to restructure the troubled
financial sector.”
The draft report also notes “the initial
request for financial assistance was made by
Cyprus on 25 June 2012, but differences
of positions as regards the conditionality,
as well as the rejection of an initial draft
programme by the Cypriot Parliament, delayed the final agreement on the EU-IMF
assistance programme until 24 April (EU)
and 15 May 2013 (IMF), respectively, and
on 30 April 2013 the Cypriot House of
Representatives finally endorsed the ‘new’
agreement.”
The European Parliament “deplores the

42 Gold the international investment, finance & professional services magazine of cyprus

The European
Parliament has
issued a highly
critical draft
Enquiry Report
on the role and
operations of
the Troika with
regard to the euro
area programme
countries. 

unpreparedness of the EU and international institutions, including the IMF, for
a sovereign debt crisis of a large magnitude
inside a monetary union; regrets the lack
of transparency in the MoU negotiations;
notes the necessity to evaluate whether formal documents were clearly communicated
in due time to the national parliaments and
the European Parliament; further notes the
possible negative impact of such practices
on citizens’ rights and the political situation within the countries concerned.”
The rapporteurs also points to the “unacceptable level of youth unemployment in
the four Member States under assistance