Cyprus’ banking sector appears to be entering recovery, as latest figures show better than expected progress in light of the country’s recent financial crisis.
The troubled state is expected to struggle with austerity measures aimed at reaching a budget surplus of 4 per cent of GDP in 2018. Estimates suggest that Cypriot GDP will fall 13 per cent over the next two years but initial progress is positive according to the finance minister Harris Georgiades.
“The worst is behind us as far as the banking system is concerned, we have exited the danger zone and we are into a stabilization zone.”
In March, Cyprus received an emergency €10bn loan from the Troika (EU, ECB and IMF) to help recapitalize the banking sector.
As part of the deal, the nation’s second largest bank, Laiki, was shut down whilst the largest bank, Bank of Cyprus, forced a 47.5 per cent haircut on uninsured depositors. The bailout fund was also conditional on improvements to anti-money laundering measures and fiscal discipline.
The IMF is currently in the process of publishing its first review of the bailout programme. Delia Velculescu, mission chief for Cyprus said: “This review found the programme to be on track, with authorities having made good progress towards meeting their objectives.”
This is from the official Cyprus News Agency.
“The worst is behind us as far as the banking system is concerned, we have exited the danger zone and we are into a stabilization zone,” Cyprus Finance Minister Harris Georgiades said at a workshop on hydrocarbons and sustainable development in Nicosia today.
“This review found the programme to be on track, with authorities having made good progress towards meeting their objectives,” IMF mission chief Delia Velculescu said today during a conference call at the end of a mission to Cyprus.