Greece told to try harder as Cyprus finishes with IMF support

8 Mar 16

Eurozone finance ministers have urged Greece to put in “extra effort” in implementing economic reforms, as it was announced that Cyprus would be dispensing with International Monetary Fund support earlier than scheduled as its economic performance "exceeded expectations".

Following a Eurogroup meeting yesterday, Eurogroup president and Dutch finance minister Jeroen Dijsselbloem announced that eurozone inspectors would complete a much-delayed review of Greece’s adherence to its reform commitments, noting that the country’s government needs to put in “more effort” for a good outcome.

Meanwhile, IMF managing director Christine Lagarde congratulated Cyprus on its decision to end its IMF-backed support package months ahead of schedule as reforms delivered “an impressive turnaround” for the economy over the last three years.

Cyprus will also complete its €9bn eurozone support programme without a successor arrangement. One action under the programme, the privatisation of the Cypriot Telecommunications Authority, remains to be completed.

A Eurogroup statement said: “The commitment of the [Cypriot] authorities and the Cypriot people to the overall programme has been essential to a fiscal performance that has exceeded expectations.”

The country’s economy returned to positive growth last year, expanding by 1.5%, its banking system is much stronger, and public debt is on a firmly downward trajectory.

Cyprus has also successfully issued three Eurobonds in the last two years, marking its reintroduction to international capital markets.

Both the Eurogroup and Lagarde commended these achievements. Lagarde added that the reform momentum must continue in a context of renewed volatility in global financial markets.

Cyprus’ €1bn IMF-supported programme, scheduled to end on May 14 this year, was terminated yesterday. The eurozone programme is expected to end at the end of this month. Both began three years ago, in March 2013.

Greece’s latest €80bn bailout programme, agreed last July, has not had as much success. The successful review of reforms required under the programme is needed to release further rescue loans and enable discussions on how to reduce the country’s debt burden.

While Dijsselbloem said he expects that discussion to begin soon, “more work will have to be done” and “extra effort” needs to be delivered for the review to be successful.

He stated that there is “enough common ground” for the review to go ahead, however fiscal gaps persist and some reforms will have to be deepened.

The Eurogroup called on the Greek government to deliver that extra effort.

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