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Cyprus FinMin announces significant relaxations to capital controls

12 February, 2014

Finance Minister Harris Georgiades announced that there will be significant relaxations to capital controls next week.

Georgiades noted that the third review of Cyprus` adjustment programme “has been successfully completed”.
A delegation of Cyprus` lenders (the European Commission, the European Central Bank and the IMF, collectively called as the Troika), completed yesterday the third programme review.

“There has been significant progress” Georgiades told the Press, adding that “the banking sector is stabilising”.
“I can announce that, starting next week, we will have significant relaxations of the restrictive measures”, said the Minister of Finance.

He noted however that the challenge to deal with non performing loans still remains.
Public finances remain under control, confirming the correctness of the planning and decisions made so far, he said.

Georgiades also said that the updated Memorandum of Understanding includes no alterations in timetables and in relation to the recovery process of non performing loans.
“No new provisions are introduced and there are no changes in key macroeconomic data for the next years” said the Finance Minister.

He pointed out that all of the Government’s moves and planning aim at creating a new development dynamic and added that through development, investments, entrepreneurship and encouragement of the private sector, unemployment will be tackled.
Although there has been some delay in some issues, the Minister noted, the Troika notes that “we have surpassed our goals” and the international markets acknowledge that the programme is progressing determinedly.

Georgiades said that the amount of the next tranche will be determined in the coming days.
He noted that in order for the next tranche to be disbursed the Parliament must pass the bill that defines the structures and decision making processes for the privatisation of semi governmental organisations, warning that if the bill does not the House approval “we will have problems during the next Eurogroup meeting”. He said that the bill will be sent to the Parliament soon.

In relation to the latest developments on the Cyprus issue and in particular the resumption of peace talks aiming at finding a solution to the Cyprus problem, Georgiades noted that in case the outcome is positive, the effects will be “crucially positive on the economy’s outlook”.
Cyprus has been divided since 1974 when Turkish troops invaded and occupied the island’s northern third. A meeting earlier today in Nicosia between the two community leaders, Cyprus President Nicos Anastasiades and Turkish Cypriot leader Dervis Eroglu, marked the resumption of the stalled UN-led peace talks.