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Cyprus Exits The Bailout Scheme

Cyprus Exits The Bailout Scheme

Monday, the 7th of March 2016, Cyprus exited from the bailout scheme after 3 years from its commencement.

Cyprus’ Finance Minister, Mr. Harris Georgiades presented to his EU counterparts, a detailed report on the legislative reforms made at all levels, the measures taken, the performance of budgetary and macro-economic factors and the deleveraging of the financial system. The issue which was pending was the passing of the legislation regarding the privatization of CYTA which was received with objections from all parties and trade unions apart from the ruling Democratic Rally. The said pending issue deprived Cyprus of its last installment of the bailout programme.

The Eurogroup commended the Cypriot authorities for the overall successful implementation of the programme and the important achievements made in the three years since its commencement.

Cyprus entered the bailout scheme in March 2013 with a recession of 5.4%, the largest in its history, and exited the programme with an expected economic growth of 1.5% in 2016.

The Memorandum will officially expire on the 31st of March 2016 while the IMF programme will be completed in May 2016.

The repayment programme of the € 7,2 billion which Cyprus borrowed  from the EU programme and the IMF is expected to commence in 2019 and will end in 2031.

After the exit from the Memorandum, Cyprus will be subjected to biannual checks from its international lenders. The audits will be similar to those of the other 26 European Union countries, except Greece, which is still in a memorandum.

As stated by the European Commission Vice-President for the Euro & Social Dialogue, Mr. Valdis Dombrovskis, until 75% of the loan taken by Cyprus is repaid, the international institutions will assess and monitor the progress of the economy.

Furthermore, the EU ministers will discuss on Tuesday the 8th of March 2016, the EU’s proposed new rules to tackle tax avoidance by large companies and the EU’s Economic and Financial Affairs Council will also debate the banking union and national budgets.

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