By
Matthew Russell Lee
UNITED
NATIONS, July 30 -- When the International Monetary Fund took
questions about Cyprus on an embargoed media call about its
concluding statement for the 2014 Article IV Consultation and its
fifth review of Cyprus’s economic program on July 30, most were
about foreclosures.
The
IMF's Mission Chief for Cyprus Delia Velculescu said several times
that the next tranche of the bailout is unlikely in September if a
law speeding foreclosures is not enacted by then, despite nearly
across the board opposition from political parties.
For
example, deputy spokesman Athos Antoniades said. “The Democratic
Party will not vote on such a sensitive issue with a gun to its
head.”
But
that is the situation: no law, no money.
Inner
City Press asked Velculescu about the discrepancies between PIMCO's
estimate of what Cyprus' banks needed, and the lower BlackRock
estimate that has recently come to light.
Velculescu
replied that “at the time of the on-set of the program the
requirement was for an independent assess of capital needs in the
banking sector.” She said, “Countries have decided of course on
individual independent assessors... PIMCO was chosen in Cyrus.”
Backing
up PIMCO and the resulting capitalization framework (and “bail-in”),
Velculescu said, “we believe the assessment was done
independently... with methodology that were specific to the company
that undertook it.”
Inner
City Press asked, “So BlackRock was wrong?”
Velculescu
replied, “BlackRock was not chosen for the assessment that was
undertaken in Cyprus.. the recapitalization was done under PIMCO..
BlackRock was the assessor in another country.”
So
is this a case of two financial firms snarking at each other, on a
competitive basis, or as PIMCO acting for those who wanted to justify
the bail-in and the “gun to the head” that has come afterwards?
We'll have more on this.
