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13 Sep 2013
Eurogroup heralds Cypriot efforts, though long road to recovery remains
FXstreet.com (Lisbon) - Earlier today, the Eurogroup welcomed the conclusion of the Troika's first review mission, stating that the adjustment program for Cyprus is on track.
Indeed, the Cypriot authorities have taken decisive steps to stabilize the financial sector, meeting the fiscal targets and having already taken structural reforms forward. However, because the short-run economic outlook remains difficult and subject to considerable uncertainty, continued full and timely policy implementation remains essential for the success of the program.
In addition, the Eurogroup notes with satisfaction that the Bank of Cyprus was taken out of resolution on 30 July. This marks an important milestone for restoring confidence in the Cypriot financial sector. Ministers acknowledged that the remaining challenges regarding the financial sector are being addressed. The Cypriot authorities have notably taken further action to reform the cooperative credit institutions sector and have set out a clear agenda to restructure and recapitalize other financial institutions. The Eurogroup looks forward to the swift implementation of the Anti-Money Laundering action plan.
As far as fiscal consolidation is concerned, the Eurogroup welcomes that Cyprus has taken effective action towards correcting the excessive deficit by 2016 as recommended by the Council on 16 May 2013.
The Eurogroup endorsed the disbursement of the next tranche of financial assistance to Cyprus following the fulfillment of the prior actions and the completion of the relevant national procedures. The disbursement of EUR 1.5 billion is foreseen to take place by end-September, after the formal approval by the ESM Governing bodies. The IMF Board is scheduled to decide on the disbursement of EUR 86 million on 16 September.
Indeed, the Cypriot authorities have taken decisive steps to stabilize the financial sector, meeting the fiscal targets and having already taken structural reforms forward. However, because the short-run economic outlook remains difficult and subject to considerable uncertainty, continued full and timely policy implementation remains essential for the success of the program.
In addition, the Eurogroup notes with satisfaction that the Bank of Cyprus was taken out of resolution on 30 July. This marks an important milestone for restoring confidence in the Cypriot financial sector. Ministers acknowledged that the remaining challenges regarding the financial sector are being addressed. The Cypriot authorities have notably taken further action to reform the cooperative credit institutions sector and have set out a clear agenda to restructure and recapitalize other financial institutions. The Eurogroup looks forward to the swift implementation of the Anti-Money Laundering action plan.
As far as fiscal consolidation is concerned, the Eurogroup welcomes that Cyprus has taken effective action towards correcting the excessive deficit by 2016 as recommended by the Council on 16 May 2013.
The Eurogroup endorsed the disbursement of the next tranche of financial assistance to Cyprus following the fulfillment of the prior actions and the completion of the relevant national procedures. The disbursement of EUR 1.5 billion is foreseen to take place by end-September, after the formal approval by the ESM Governing bodies. The IMF Board is scheduled to decide on the disbursement of EUR 86 million on 16 September.