Cyprus economy is small but systemic risks may not be small, says Draghi

“What I can say is that there is good progress” he said, replying to questions on Cyprus during a press conference, adding that “in terms of exactly assessing the progress, I would suggest you read the second Eurogroup statement, hinting the possibility that there will be a programme by the second part of March”.

The ECB Governor continued to say that “we have to keep in mind that the solution has to reflect two equally important dimensions; one is the debt sustainability and the other is financial stability”. And the Eurogroup, he added, “is actually working on both of them quite actively”.

According to Draghi there are two considerations: “The Cyprus economy is a small economy but the systemic risks may not be small”. At the same time, he said, “our Union is not a transfer union, so we have to keep this in mind”.

“It is very important that the Cyprus government takes this opportunity to revisit the anti money laundering legislation not so much in terms of legislation but actually accepting the international oversight of how effectively this legislation has been implemented”, he noted.

Replying to another question, he said “the Cypriot government agreed to accept an outside audit of its banking sector to ensure it complies with international money laundering standards as a condition to receiving its long-delayed bailout”.