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Cyprus exits economic adjustment programme

Cyprus exits economic adjustment programme

Cyprus Finance Minister Harris Georgiades

EUROGROUP finance ministers have given their formal approval for Cyprus to exit its three-year Economic Adjustment Programme that expires officially on 31st March.

The ministers held a meeting in Brussels during which the Cyprus Finance Minister Harris Georgiades presented a report on Cyprus’ progress in implementing the reforms and complying with the requirements under its €10 billion programme that was concluded in March 2013.

The Eurogroup will continue supporting the Cyprus reform process in the context of post-programme surveillance and of the regular EU and euro-area specific monitoring frameworks.

Georgiades said that Cyprus is determined to continue with reforms contained in its Economic Adjustment Programme that are still pending, which include the privatisation of the Cyprus Telecommunications Authority (CYTA).

Cyprus drew €7.25 billion from the total assistance sum available of €10 billion and beat all projections of a sharp drop in its gross domestic product (GDP), achieving a growth of 1.4% last year after a four year recession. It also managed to keep its sovereign debt to about 106% of its GDP, 20 percentage points below projections.

Cyprus is the fourth member of the euro area to exit its bailout following Ireland, Spain and Portugal.

Speaking to reporters last Thursday Georgiades said: “The completion of the programme is not the end of the road, but it is a new beginning, which will see dedication, commitment and effort, in the direction of further reforming the economy of Cyprus, staying clear of the mistakes of the past.

“We had the chance to review the good progress achieved during the last three years, which saw the stabilization of the banking sector, the consolidation of public finances, the promotion of much-needed structural reform, the re-establishment of market access and, primarily, the return to positive growth rates.”

Further reading

Eurogroup statement on Cyprus – 7th March 2016