articles | 10 January 2016

Eurogroup optimistic of Cyprus’ existing bailout programme

Eurogroup President Jeroen Dijsselbloem has said he is optimistic for Cyprus’ smooth exit from its three-year €10b bailout programme at the end of March 2016, even making a comment on the island’s possible reunification.

In an interview with Greek language daily Politis on Sunday, Dijsselbloem said he was in constant contact with Cypriot Finance Minister Harris Georgiades on open issues and the steps relating to the exit itself.

Georgiades is due to attend the meeting of the Eurogroup on January 14 ostensibly having closed two of the three prerequisites – the EAC and the sale of loans to third parties. The EAC will be the subject of a cabinet decision on Monday but unions are still an obstacle.

If the issue of CyTA’s privatisation is not closed positive, the government is prepared for non-disbursement of the next and last €400m tranche, Politis said, adding that in the case of both Portugal and Ireland, the final tranches were not disbursed.

“We are very near the end of the programme,” said Dijsselbloem. “Most measures have been implemented and in the coming months we will discuss with the Cypriot government on how it sees the country’s exit from the programme. At the stage we are at today, there are open issues, but also money available under the programme,” the Eurogroup boss said.

The question would be what the Cypriot authorities would need and what under what terms Cyprus would exit the bailout, he added, avoiding focusing on any particular obstacles that would be remaining at that time and saying it would be premature predict what might happen by the end of March.

“It’s too early to say,” he told Politis. “Cyprus has done very well. The recovery was faster and stronger than expected and all of the money available under the programme was not used,” he added.

Politis said the day after the expiry of the programme – April 1 – the Finance Ministry would have to engage in a race to convince international rating agencies to see the bigger picture and focus on the willingnessof Cyprus to continue the course reforms. The aim is to return the country to investment grade.

Dijsselbloem said he was optimistic for Cyprus, even mentioning the political negotiations. “It’s very interesting what is happening in Cyprus. I am optimistic,” he said.

Source: Cyprus Mail

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