NICOSIA – Eurozone Finance Ministers endorsed on Friday the disbursement of the next tranche of financial assistance of €1.5 billion to Cyprus, expected to take place by the end of September.
In a statement on Cyprus, the Eurogroup “welcomes the conclusion of the Troika’s first review mission that the adjustment programme for Cyprus is on track”.
The Cypriot authorities, says the statement, “have taken decisive steps to stabilize the financial sector, meet the fiscal targets and taken structural reforms forward”.
“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 programme” the Eurogroup warns.
At the same time the 17 Eurozone’s Finance Ministers note “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”, the statement says.
It is added that the ministers “welcome 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 statement notes.
It is also pointed out that the Eurogroup “looks forward to the swift implementation of the Anti-Money Laundering action plan”.
Eurozone’s Finance Ministers welcome “that the Cypriot authorities will continue to gradually relax the administrative measures that had been put in place in view of the unique and exceptional situation of Cyprus’ financial sector”. Further relations, the statement adds, will be in line with the roadmap of 8 August, 2013.
Referring to fiscal consolidation, the statement 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 endorses 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 statement says.
Moreover it notes that the disbursement of €1.5 billion is foreseen to take place by the end of September after the formal approval by the ESM governing bodies.
The IMF Board, the statement concludes, “is scheduled to decide on the disbursement of €86 million on 16 September.
Excluded from international markets since May 2011, Cyprus requested and received a €10 billion financial assistance package from the Troika (EC, ECB, IMF).
The package featured a sizeable reduction of the island`s banking sector, as well as bail-in of uninsured deposits, which hampered the services sector, one of the island`s main source of income.