The
Eurogroup welcomes the Troika's conclusion following its third review mission
that Cyprus' adjustment programme is on track. We commend the authorities'
continued prudence in budgetary execution which, together with a less severe
recession than anticipated, has contributed to meeting fiscal targets for 2013
with a considerable margin. The outlook remains challenging and maintaining
fiscal discipline remains necessary. At the same time, efforts to create the
conditions for sustainable growth need to be intensified.
We
note with satisfaction the signs of improvement in macro-financial stability as
programme
implementation has progressed. We welcome the steps already taken to enter the
second stage of the gradual relaxation of restrictions on payment flows
signified by the relaxation of restrictions on fixed term deposits, in line
with the government's milestone based roadmap. Efforts will need to continue to
effectively implement the planned reforms in the financial sector, including in
arrears management and the structural measures agreed in the Memorandum of
Understanding.
With
the adoption of the umbrella law for budgetary processes and of the
privatisation law, Cyprus has also complied with the prior actions agreed under
this review. The Eurogroup has therefore endorsed in principle the disbursement
of the next tranche of financial assistance to Cyprus. Subject to national
procedures and formal approval by the ESM governing bodies, the ESM is
scheduled to disburse EUR 150 million by the beginning of April. Concurrently,
the IMF Executive Board is expected to decide on the disbursement of EUR 86
million.
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11
March, 2014
