Brussels, 28/11/2013 (Agence Europe) - In a meeting with Euro Commissioner Olli Rehn on Wednesday 27 November, Cypriot Finance Minister Harris Georgiades gave the European Commission assurances on implementation of key measures in the Cypriot structural adjustment programme (the strings attached to a financial aid package).
Olli Rehn pointed out that the programme was on track on many issues, including the fiscal side and on the restructuring of the financial sector. However, he also stressed that further effort was needed to deliver on remaining key commitments before the end of the year. There remain some concerns on the implementation of specific prior actions, notably on the implementation of the services directive and on progress on privatisation.
Last Monday, the Commission's representative at the troika of lenders to Cyprus called for a speeding up of the structural adjustment programme before the next tranche of aid is disbursed in December. A source said: “Assurances were received from the Cypriot authorities of commitment to their implementation, as set out in the MoU ». President of the European Commission José Manuel Barroso said that he had discussed with the Cypriot president, Nicos Anastasiades, “what we can do in concrete terms to support Cyprus” (see EUROPE 10972). The idea of aid from “horizontal” EU funding was mentioned. Anastasiades said that things are very difficult for Cypriots. The Commission forecasts a less severe economic recession in 2014, with GDP shrinking by 3.9%, compared with 8.7% in 2013, but unemployment rising from 16.7% to 19.2% over the same period.
The country's biggest bank, Bank of Cyprus, has announced losses of €1.3 billion for the first quarter of 2013 due to non-performing loans and the liquidation of its business in Greece. By way of comparison, the bank's losses in the first quarter of 2012 stood at €134 million. Deposits at the bank have shrunk from €28.4 billion to €17 billion in the first six months of 2013. (EL/transl.fl)