His satisfaction that SYPRODAT has established that the efforts of the Ministry of Finance and the Government in relation to the divestments and the reduction of NEDs have brought some results, the Minister of Finance expressedh2>
The satisfaction that SYPRODAT has established that the efforts of the Minister of Finance and the Government in relation to the divestments and the reduction of Non-Performing Loans (NPLs) have brought some results, the Minister of Finance Makis Keraynos expressed, after a meeting at the Ministry of Finance with the President of SYPRODAT Costas Melas and the Director of the Association Jenny Papacharalambous.
In statements after the meeting, during which the divestments and the reduction of NEDs were discussed, Mr. Keravnos, after thanking Mr. Mela, for the update regarding the association's efforts to reduce Non-Performing Loans, an issue that plagues Cypriot society, said that the goal is common and that is the reduction of NPLs.
The Minister expressed his appreciation for the efforts of SYPRODAT on these issues and noted that he accepts the suggestions made by the association, “with the key word 'consent' mentioned by Mr. Melas”, as he said.
Also, Mr. Keravnos expressed satisfaction that SYPRODAT has “found that the efforts of the Minister of Finance and the Government in this direction and towards the banks and credit acquisition companies have brought some results”.
For his part, Mr. Melas, after describing the meeting as very productive, thanked the Minister for the pressure he exerted on banks and credit acquisition companies, which “brought results”, as he said.
He reported that they discussed “the two burning issues we are living in Cyprus today, which are sales and the reduction of Non-Performing Loans” and added that they have “agreed on everything”.
Mr. Melas said that he submitted a memorandum to the Minister on the positions and ideas of the association as to “how these two major issues, which have occupied the Cypriot economy for many years, can be dealt with”.
He said also that for SYPRODAT the process is simple as long as there is consent and good intention which the banks and other banking entities have demonstrated in practice that they want to do it.
For example, Mr. Melas referred to a Bank of Cyprus initiative that was explained in the link last Monday by the bank's leadership, to Themis plans and to a statement by Hellenic Bank which invites borrowers to go to the bank to discuss and that it is ready to reach deep into the pocket.
The President of SYPRODAT said that “it is the best time” to solve these two problems and “to put aside definitively and irrevocably the foreclosures that are hurting borrowers after the consensual solutions will be found through which the loans will become serviceable and removed from the list of NEDs”.
It is not rational when you do not need a loan to issue bonds for individuals
On the observation that European states are proceeding to issue government bonds for individuals that results in banks being put under pressure to increase deposit rates, the Minister of Finance said that the Ministry has studied the matter and the proposals that have come to it, adding that the facts of each country are different.
“To issue bonds means that you increase the public debt,” he said and added that “to increase the public debt at a time when you do not need it and when you are trying to reduce it, is not a rational action.”
He also mentioned that “the small Cypriot market every time a (debt) issue is made cannot absorb more than 50 to 60 million”.
“Therefore even if an issue is made with 1 or 2 billion euros at a time when in the banking system there are approximately 50 billion euros of deposits and 25 billion euros of loans, it will not create any incentive to increase bank interest rates, as is claimed,” he added.
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