World Bulletin / News Desk
Greek Cyprus's international lenders began reviewing how the island is meeting the conditions of it 10 billion euro bailout on Wednesday, looking to see whether it should get the next tranche of aid.
The appraisal is the first since Greek Cyprus secured a deal with the International Monetary Fund, the European Commission and the European Central Bank in March, pulling the cash-starved country away from the brink of financial meltdown.
It dealt a harsh blow to thousands who lost their savings in two major Greek Cypriot banks, however.
Nicosia received a first tranche of aid in June worth 3 billion euros and euro zone finance ministers will decide on whether to issue the next tranche in mid-September, the size of which is yet to be determined.
Greek Cypriot President Nicos Anastasiades said last month that some provisions of the bailout deal needed tweaking to address problems in the island's battered banking sector.
Greek Cyprus had to wind down one lender, Laiki Bank, and use customer deposits exceeding 100,000 euros to prop up another, Bank of Cyprus, as part of the bailout agreement.
One area of focus for the so-called troika of lenders during the two-week review will be why the central bank has yet to finalise how much equity Bank of Cyprus shareholders will receive in exchange for giving up their deposits, a process known as a bail-in.
Finance Ministry officials are keen to see the resolution settled, worried that the uncertainty it is causing is preventing an easing of capital controls, introduced to prevent a cash flight after the bailout was agreed in March.
"Swiftly exiting the resolution status would allow us to take new steps to further ease, and ultimately eliminate capital controls," Finance Minister Harris Georgiades said on Tuesday.
An independent audit of Bank of Cyprus assets is under way, which would define precisely how much of depositors' cash would be seized.
The island has promised its lenders that it would consider the option of selling some of its gold reserves to help pay down its debt but Georgiades said on Tuesday that that was only one option under consideration.
Under the bailout, Greek Cyprus has agreed to cut its budget deficit to 2.4 percent of GDP in 2016, from an estimated 5.9 percent this year.
Although foreign banks on the island were exempt from most restrictions imposed under the bailout, customers at banks in Greek Cyprus are limited to withdrawals of up to 300 euros a day, cheques cannot be cashed and bank transfers are vetted.
Those restrictions are adding to an acute credit crunch caused by financial institutions which are jittery about their balance sheets in a rapidly deteriorating economy and have put the brakes on lending, economists say.
"Banks aren't lending," said economist Yiannis Tirkides, who did not wish to disclose the name of his company. "A lot has to do with expectations, and that contributes to the uncertainty," he said.
Ursula von der Leyen held talks with her Saudi counterpart, Deputy Crown Prince Mohammed bin Salman, on boosting the "excellent bilateral relations" between the two countries, the mission added.
Most analysts predict president Mario Draghi will extend an 80-billion-euro ($86-billion) per month bond-buying scheme beyond the current March deadline at his press conference.
A record-setting wave of Chinese investment abroad has fuelled concern in Beijing over capital flight, reckless spending overseas, and the yuan's fall against the US dollar.
The deal is part of a broader privatisation drive and comes despite Moscow being mired in Western sanctions over the crisis in Ukraine that have played a major part in plunging the country into recession.
Germany’s ambassador to Ankara says German companies operating in Turkey should think about tomorrow
After months of disagreement, OPEC members last week hammered out a deal to cut oil output for the first time in eight years.
Ali Shareef al-Emadi predicted growth of 3.4 percent in 2017, in line with an International Monetary Fund estimate and up from a projected 3.2 percent this year.
"Many citizens in advanced economies are facing heightened uncertainty, lamenting a loss of control and losing trust in the system," Carney said in a speech at Liverpool's John Moores University.
European stock markets are also set for a weak start, with Italy underperforming as investors brace for turbulence and political crisis in the euro zone's heavily indebted third-largest economy.
The euro tumbled on Monday after Italian Prime Minister Matteo Renzi said he would resign as he conceded defeat in a referendum over his plan to reform the constitution
Rouhani's 2017-2018 budget is based on oil prices of $50 per barrel, up from $40 last year, with a focus on unemployment, water resources, railways and the environment.
Turkish parliament has already ratified the deal on construction of ‘TurkStream’ natural gas pipeline
The September rate was revised to 9.9 percent from the 10 percent first given last month.
Many analysts had expected the producers' cartel to fail to reach a deal as major players like Iran, Iraq and Saudi Arabia remained divided ahead of the meeting.
The report, which collects views of economists, business contacts and others in the 12 Federal Reserve districts in preparation for the monetary policy meeting next month, noted improved retail sales and home construction in most regions.