Nicosia, March 8, 2016/Independent Balkan News Agency
Βy Kyriacos Kyriacou
President of the Republic of Cyprus Nicos Anastasiades and Finance Minister Harris Georgiades announced Cyprus` exit from its economic adjustment programme, which was approved by a Eurogroup meeting in Brussels.
“The last Eurogroup on Cyprus` memorandum. Three years of work and consistency. We continue the serious effort” wrote on his personal account on twitter President Anastasiades.
“Cyprus has exited the Memorandum”, said Monday from Brussels Finance Minister Harris Georgiades, after the Eurogroup meeting that discussed Cyprus` programme. He warned however that the serious effort must be continued with credibility, away from irresponsible approaches, populism and the mistakes of the past.
“We owe it to our fellow citizens, especially those who have paid and are paying the cost of the derailment of our economy. We have come a great distance, we have left behind the recession, we have secured a second chance, but there is still much that remains to be done”, said the Minister.
He added that what is now needed is to continue the cautious management of the economy, the political reliability in order to achieve upgrades of the economy, to establish growth, and leave definitively behind the consequences of the economic depreciation of the past years.
He clarified that the condition is “that we will remain committed to this difficult but correct and necessary effort”. “Cyprus has already been recovered in the international markets and certainly through the continuation of the effort will maintain this access” he said, pointing out that the Eurogroup will state that Cyprus` economy is clearly in a better condition than it was three years ago.
Cyprus came out on Monday from its 3-year economic adjustment programme that officially expires on 31 March. Cyprus is the fourth euro area member state to exit its bailout following Ireland, Spain and Portugal. The island-state used €7.25 of the total €10 billion earmarked in the financial bailout.
The Eurogroup congratulated on Monday, in a meeting in Brussels, Cyprus` economy and Finance Minister Harris Georgiades on the exit from the economic adjustment program.
According to the President of the Eurogroup, Jeroen Dijsselbloem, Cyprus can now finance itself and is back on a competitiveness track. “It was the last Eurogroup before the end of the month,” said European Commissioner for Economic and Financial Affairs, Pierre Moscovici. “We need to give our compliments to Cyprus” he noted.
The Eurogroup, has issued a statement, where it supports the Cypriot government’s decision to exit its macroeconomic adjustment programme without a successor arrangement.
“The Eurogroup commends the Cypriot authorities for the overall successful implementation of the programme and the important achievements made in the past three years, and also thanks the institutions for their vital contribution towards this end”, said the statement.
The Eurogroup welcomes the fact that economic activity has continued on a positive trend, and the banking system has further healed.
“The commitment of the authorities and the Cypriot people to the overall programme agreements has also been essential to a fiscal performance that has exceeded expectations. These positive developments have been instrumental in regaining investor confidence in the Cypriot economy, with the sovereign returning to the international markets”.
Furthermore the statement says that the Cypriot banking system has undergone a deep transformation and that the ground covered since March 2013 has been significant and the reform measures, which have been executed or are underway are essential to restoring the Cypriot financial system to viability.
However, it points out that work must continue with determination to secure the reduction of the non-performing loan ratio to healthier levels.
“This includes the rigorous and swift implementation of the insolvency framework and foreclosure laws adopted in 2015 together with further measures including the legislation on sale of assets and effective use of the full range of the available non-performing loan management tools”.
At the same time, the Eurogroup notes that the last prior action under the current review has not yet been completed.
“The privatisation of the Cypriot Telecommunications Authority would be another growth-enhancing step. Along with public administration reform and other structural reforms discussed during the programme, this would cement the improvements in public finance and support sustained economic growth”.
The Eurogroup also mentions that in total, about 30% of the EUR 9 bn programme envelope remains unutilised.