NICOSIA, Cyprus – A European Union official says the economy of bailed-out Cyprus is projected to grow 2 per cent annually until 2020.
But Jakob Wegener Friis warns there’s a risk that long-term economic growth could be lower if Cypriot authorities don’t tame high public debt and unemployment levels, as well as a standstill in investment.
Friis, who heads the European Commission team supervising Cyprus’ bailout program that is due to wrap up early next year, was speaking at a conference on Tuesday.
He said close to 60 per cent of all loans are sour and although there are signs that debt restructuring is picking up, it’s still not enough.
Friis also urged Cypriot authorities to push ahead with other, pro-growth reforms such as privatizing the country’s telecommunications and ports.