Cyprus’ Finance Minister Haris Georgiades has said that the government is preparing intensively for the first assessment by Troika, on July 17, adding that it has been agreed with EU partners that the Bank’s of Cyprus exit from the resolution regime as soon as possible is a top priority.
Referring to yesterday’s Eurogroup meeting and to the discussion on the progress Cyprus achieved in implementing the bailout programme, Georgiades said that he explained that the government is preparing and looking forward to this assessment.
The main question is the banking sector, especially the issue of the Bank of Cyprus and "the need to exit the resolution regime without further delay,” Georgiades said.
In this context, he added, the government will do everything to reduce the outstanding and fulfills all of its obligations.
Referring to the importance of quarterly assessments, he said that this process would essentially be repeated every three months, adding that at the end of each assessment, the Memorandum will be updated and on the basis of the evaluation a decision will be taken for the next tranche.
The programme provides for two trances in 2013, one to be paid at the end of September and the second at the end of the year, Finance Minister added.
Asked about public finances, Georgiadis said that the figures in the first five months are better than forecasted and better than last year.
However, he added that he does not consider these positive results as indicative to the course of the economy and public finances in the coming period.
Despite positive indications, we do not work based on these data, but on much more conservative scenarios, he said, explaining that public spending will be reduced by 11% in 2014.
Referring to the public sector, he said that it has to be smaller in size, more efficient and less costly, adding that "we want to put public finances on a sustainable basis".
According to the Finance Minister, special emphasis should be put on the rationalization of public spending, adding that no new taxes will be introduced.
Cyprus joined the EU in 2004 and in 2008 it adopted the euro. On March 25, Cyprus agreed with the European Commission, the European Central Bank and the International Monetary Fund, collectively known as the Troika, on a €10 billion bailout, which included the winding down of Cyprus Popular Bank the island`s second largest bank, whose assets and employees were absorbed by Bank of Cyprus (BoCY), the island`s largest lender, which is currently undergoing a major restructuring.
