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IMF Freezes Tranche for Cyprus Over Foreclosure Law

CyprusThe International Monetary Fund said it will not release the next tranche of bailout funds to Cyprus because of the suspension of a law on foreclosures.
According to a Reuters report, the IMF will not release the 88 million euros tranche of the bailout program after the Cypriot Parliament decided to delay the new law on foreclosures that should go into effect at the end of December. The unpopular law that speeds up foreclosures will go into effect on January 30.
The IMF said that the legislation on foreclosure was one of the key requirements for the completion of the fifth program review and Cyprus has not met that.
Cypriot lawmakers suspended the implementation of the repossession law, citing delays by the government in preparing and submitting the insolvency framework for debtors.
Prior to the vote, the European Union had released a 350 million euros tranche, bringing the amount of bailout funds given to Cyprus so far to 5.7 billion euros. The total bailout program for Cyprus is 10 billion euros.
Finance Minister Harris Georgiades was against the suspension of the law and said that the IMF reaction was expected. He said that the parliament’s decision was an “incalculable blow to creditworthiness and seriousness of the country, to the confidence which we could restore with so much effort and is so easy to lose.”

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