articles | 12 October 2015

ESM unlocks €500mln tranche to Cyprus

The European Stability Mechanism (ESM) announced it would be disbursing €500mln to Cyprus following a positive assessment of the seventh review of the island’s macroeconomic adjustment programme

“Cyprus has taken another step towards a successful completion of its ESM programme in the first quarter of 2016,” ESM Managing Director Klaus Regling said. “The government has implemented the reform programme and the results are clear: not only with a correction of imbalances and a stabilisation of the financial sector but also a gradual return to growth and reduction in unemployment. This is the same pattern that we have seen in previous successful exits from ESM/EFSF programmes.”

Regling warned however, that the need for reform did not end just becauseCyprus reached the final stretch of its programme.

“Cyprus has many challenges ahead, most importantly a pressing need to vigorously reduce the very high level of problem loans which are burdening the banks and limiting their capacity to support to the economy.”

Once this €500 million tranche is released, the total amount of disbursed ESM financial assistance for Cyprus will add up to €6.3 billion out of the approximately €9 billion committed by the ESM at the start of the financial assistance programme.

Source: Cyprus Mail

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