articles | 05 December 2013

Cyprus economy exits 'danger zone'

Cyprus is out of 'the danger zone' says Finance Minister Harris Georgiades, adding that the recovery is due to Cyprus' willingness to commit and enact reforms quickly.

In an interview with CNBC in the US, where he held a series of meetings with US officials, including his US counterpart Jack Lew, Georgiades said that the recovery was due to Cyprus` willingness to commit and enact reforms quickly, including the recapitalization of the banking system and budget cuts. 

In addition, the Minister said Cyprus is a good place for business, noting that most restrictions imposed on bank transactions will be lifted by January, except the transfer of capital outside Cyprus. 

"I am not speculating as to when that will happen. I will obviously be reviewing the situation, but I think the gradual but steady relaxation is the correct one under the circumstances and we shall continue," he said, pointing out that: “The stronger the confidence in the system… the easier and the sooner we shall be able to lift all the restrictions”. 

On March 25, 2013 Cyprus and the Troika (European Commission, European Central Bank, International Monetary Fund) agreed on a €10 billion financial assistance which featured an unprecedented haircut on uninsured deposits in a bid to recapitalize the Bank of Cyprus, the island`s largest lender. The bail-in also provided that Cyprus Popular Bank, the island`s second largest bank would be wound down with its good part absorbed by the Bank of Cyprus.

Source: Financial Mirror

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