Statement by the Minister of Finance on the issuing
of a European bond by the Republic of
Cyprus
The Minister of Finance, Mr Harris Georgiades, made the following
statement from Brussels in relation to the continuing discussion regarding the
issuing of a bond by the Republic of Cyprus:
“I would like to reiterate that the successful issuing of the
European bond, the first to a foreign investor after 2010, constitutes a
strategic move that is related to the timely preparation of Cyprus’ return to
the markets but also to the need to manage and better structure the public
debt.
An important part of the existing debt has a high cost and a short
term duration. This for example is true
in the case of the bond that was issued to Laiki Bank in 2012. The particular bond, amounting today to
approximately €2 billion, has 2017 as a repayment date and is not included in
the Troika’s financial plan. In total,
the expirations of debts the first 18 months after the completion of the
programme surpass €3 billion.
Therefore, with the timely extraction of additional lending, the Republic
of Cyprus will be able to manage and slowly repay the existing debt.
It must be noted that through the public debt management policy that
has been implemented in the last year, both the reduction of the median cost of
borrowing has been achieved as well as the elongation of the repayment period
with a major benefit for public finances.
Of course, the lending agreement remains a basic funding tool for the
next two years. But it is an obligation
of the Republic of Cyprus, in parallel to the effective implementation of the
memorandum, to timely prepare the ground for the restoration of its ability to
autonomously fund its needs. I hope
that everyone, and especially those responsible for Cyprus’ exclusion from the
markets, will understand and support this national effort.”
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