THE government was last night still trying to find some sort of common ground with international lenders on certain issues threatening to bring Cyprus’ bailout talks to a deadlock.
The two sides were still at odds over privatisations, wage indexation, pensions and the proceeds from natural gas exploitation.
Last night, talks were held at the hotel where the heads of the troika delegation were staying in a bid to resolve the outstanding issues as Nicosia appeared to be running out of time.
Despite some signs of optimism, it did not appear that the two sides had managed to bridge all their differences.
No deal was struck last night as the heads of the troika were scheduled to leave the island today.
Other members of the group already departed in the past two days.
But reports suggested last night that negotiations would continue remotely if a deal was not achieved last night.
This was despite warnings that the economy and the banking sector could suffer further from a delay in announcing an agreement.
Fitch ratings yesterday downgraded Cyprus further into junk territory citing the uncertainty over the cost of bank recapitalisation and delays in negotiating a bailout, which has contributed to deteriorating economic conditions.
Earlier, there were signs that negotiations had come to an end, as grim-faced party leaders walked out of a meeting with President Demetris Christofias saying the government did not have a contingency plan in case the talks fell through.
Government spokesman Stefanos Stefanou later said that the troika was not leaving immediately.
“We are in negotiations with them. I have said that some very difficult issues we disagree on are under discussion and we will continue this effort,” Stefanou said.
The spokesman said that the troika’s departure did not mean efforts would stop.
Stefanou said a lot of ground had been covered in the negotiations and convergences had been achieved.
The spokesman took a shot at party leaders who put all the responsibility on the government but did not offer any suggestions on how to proceed.
Negotiations with the troika kicked-off at the finance ministry early yesterday morning and were not without incident.
The state broadcaster reported that Trade and Industry Minister Neoclis Sylikiotis had words with the troika over their demand for natural gas proceeds to be used to repay the country’s debt.
Sylikiotis’ outburst almost caused the troika to leave, the report said.
On the thorny issue of privatisations, reports suggested the troika has agreed not to touch the electricity company and the ports authority but it insisted on the telecommunications company, which could fetch a billion euros if sold.
It also emerged last night that before last night’s meeting, Finance Minister Vassos Shiarly, Sylikiotis, and Stefanou, met with Attorney-general Petros Clerides to discuss the wording of certain provisions that could be included in an agreement.