World Economy

Cyprus Reform Efforts Paying Off

Cyprus Reform Efforts Paying OffCyprus Reform Efforts Paying Off

The return to growth in the first quarter of the year shows that the reform efforts of the Cypriot people are starting to pay off, an International Monetary Fund spokesman said.

“They have done, I think as you know, a very complex restructuring of the banking system, they have successfully lifted off all capital controls and they have returned to issue debt in the market in the international market, their public finances have improved considerably,” Gerry Rice director in the communication department told reporters Thursday in Washington, according to a statement on the IMF’s website, NewsNow reported.

“Recently they approved the insolvency and foreclosure frameworks which had been an issue”, he said. Rice added that the IMF considers the new insolvency framework and the foreclosure legislation which both came into force in April “as key” to Cyprus’s economic and financial reform program agreed with international creditors in March 2013 as part of a €10b bailout, adding that they will be critical for bank credit to start “flowing again”.

He also said that the body’s board will “consider approving” on June 19, the combined fifth, sixth and seventh review of Cyprus’s program.

The official of the IMF, which is together with the European Commission and the European Central Bank part of the troika that supervises bailouts in the euro area, said that Cyprus’s return to growth “is very good news” for the country and its people. “And again the objective is growth, job creation, and living standards and it looks like significant progress is being made in Cyprus,” Rice said.

After 14 consecutive quarters of contraction, the Cypriot economy posted a quarterly 1.5 percent and an annual 0.4 percent growth rate in January to March.