NICOSIA, Cyprus – Cyprus has completed what could be the final review of its three-year, 10 billion euro ($10.73 billion) bailout program, the finance minister said Friday.
Harris Georgiades said figures released Friday confirm that the economy of Cyprus, a eurozone member, is on course to grow this year by around 1.5 per cent after years of recession.
Despite the expected growth, Georgiades stressed the government would be no let-up in its prudent spending policies and reforms.
He also hailed parliament’s approval Thursday of a law permitting the sale of bad loans. The law is designed to help banks cope with the extraordinarily high number of sour loans on their books that remain a drag on the country’s economic growth.
Georgiades said he believes the new law will be enough to convince creditors to release the next batch of bailout money.
Cyprus is also obligated to make progress on privatizing state-owned companies.
International creditors threw Cyprus a lifeline in March, 2013 that foresaw a grab of uninsured deposits in the country’s two largest banks as well as the shuttering of the smaller lender.
Georgiades said that once it receives the all clear from the EU, the government would be willing bolster the capital buffers of the country’s co-operative banks after they drastically increased their provisions against the huge number of bad loans. Nearly 60 per cent of all loans are estimated to have soured.