Georgiades who was talking on state radio CyBC said that he is “optimistic” that the government will return to the markets in the next months and that the target “related to the complete restoration of the government’s creditworthiness, the development that will relieve us from the (international) creditors’ crutches is absolutely achievable”. The minister was responding to a question on whether exogenous factors could affect Cyprus’s return to the markets.
Cyprus which was shut out of markets in May 2011, returned in June 2014, when the government issued a €750 million 5-year bond with a 4.85% average yield. The government which plans to issue new debt twice this year and to restore market access by December, three months before the financing period of its bailout programme expires, has put off its plans amid uncertainty about the Greek economy and the suspension of Cyprus’s financing. International creditors reacted so to the suspension of the foreclosure law on December 18, which is part of the economic and financial reform programme agreed in March 2013, in exchange to a €10 billion bailout.
The finance minister said that after Cyprus again beat in 2014 initial growth forecasts, when the economy shrank 2.3%, almost half of the initial forecast, it could also see a similar recovery this year, for which a 0.4% growth is forecast. The precondition is that Cyprus continues its economic reforms, which “which are the steps sought and expected by investors at home and abroad”.
“This year will continue to be difficult,” Georgiades said. “It won’t be an economy with high growth rates and low unemployment; we have some way to go until we reach this situation”.
The finance minister said that since the “engines of the Cypriot economy were turned off long before,” the government entered the economic and financial reform programme agreed with international creditors, the complete economic recovery will take time.
Georgiades also said that he is optimistic that lawmakers will pass the insolvency legislative framework on April 17. Opposition parties justified their decision to suspend the foreclosure law with the government’s delay in tabling the draft legislation on insolvencies. The implementation of the said law will allow Cyprus complete its review by the troika of the European Commission, the European Central Bank and the International Monetary Fund that oversees bailouts in the euro area, which in turn will also pave the way for Cyprus to participate in the ECB’s expanded asset purchase programme, also called quantitative easing.
Source: Cyprus Mail
