Today: March 24 2019
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Cyprus decided to take up seriously the toxic credits

Cyprus decided to take up seriously the toxic credits

Tags: Cyprus Economy, Banking, Debt

The government and political parties of Cyprus 15 March agreed on the creation of an expert commission that will study proposals for resolving the problem of unserved debt and develop a national strategy to address it, taking into account the interests of all parties involved.

Following the meeting in the Presidential Palace, a representative of the government, Prodromos Prodromu, said that a mutual understanding had been reached on how the financial sector and borrowers could be helped in solving the problem of unserved debt. The main goal, he said, is to get a national action plan that is compatible with the regulations of banks and the [European] banking supervision service in order to find the best solutions for the banking system and, first of all, for borrowers.

Recall that as of November 2017, the share of non-servicable debt was 44% of all loans. The fastest growth in lending came in the period between 2003 and 2012, which created today's problems. Borrowings increased from 21 billion euros in 2003 to 72,5 billion euros in 2012, when the country was on the verge of bankruptcy. Today, Cyprus is one of the EU countries with the highest level of unearned debt, despite progress over the past five years: private debt declined from 72,5 billion to 51 billion euros.

All parties agreed that efforts to solve the problem of unearned debt should be increased and that the state should intervene in cases where borrowers face difficulties through no fault of their own.

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