CYPRUS FACT SHEET - April 3, 2014
President meets with UNSG
President Anastasiades met on April 2, 2014 with the UN Secretary General Ban–Ki Moon in Brussels. According to a UN spokesperson: “They discussed the current state of play and the way forward in the talks for a comprehensive settlement of the Cyprus issue. The UNSG urged Mr Anastasiades to maintain the current momentum following the February resumption of full-fledged negotiations. He stressed the United Nations’ commitment to assisting the sides in reaching a comprehensive settlement in Cyprus. The Secretary-General and Mr Anastasiades agreed on the importance of implementing mutual confidence-building measures on the island.” The Cyprus President reiterated to the UNSG that confidence building measures will contribute significantly in changing the atmosphere, by giving a new push to the dialogue, while he also repeated that it is of great importance for everybody – both the Turkish Cypriots, as well as the UN – to understand the upgraded role Europe has to play, since the desired Cyprus solution is the evolution of the Republic of Cyprus into a federal state, which will be at the same time an EU member state.
Meeting between the two leaders
President Anastasiades and Turkish Cypriot leader Eroglu meet on March 31, 2014 and issued a joint statement that: “The leaders met in a friendly atmosphere and reviewed the progress of the discussions undertaken thus far by the negotiators. They agreed to continue the screening process and to conclude this phase as soon as possible, with a view to entering into the next stage of the structured negotiations. The leaders agreed to meet again in a month’s time, or earlier if necessary.”In remarks to the press the President points out that: “It appears that there is a need for further dialogue with regard to all the issues that relate to the Cyprus problem. Also ascertained or pointed out, on the part of our side, was the inconsistency of Turkish Cypriot proposals in relation to the joint communiqué.”
Eurogroup president visits Cyprus
On a visit to Cyprus on March 31, 2014 the President of the Eurogroup, Dutch Finance Minister Jeroen Dijsselbloem is received by President Nicos Anastasiades and had talks with Finance Minister Harris Georgiades, while he also met with the Parliamentary Committee on Financial and Budgetary Affairs. In statements to the press following his meeting with the Minister of Finance Mr Dijsselbloem mentioned that: “It is approximately a year ago since we took top decisions on the program for Cyprus, on the measures that were necessary in view of the strong crisis that came out of the banks and had effects on the whole economy of Cyprus. I am here today to share my support and admiration for the work that you and your Government have done and also to underline that we fully realize the effects that the measures have had on the short-term economy and the lives of the people here in Cyprus. These are difficult times. They are difficult yet inevitable measures to go through and you are taking those. And as you said you are not taking them to please Europe or the Eurogroup, but because you feel that they are necessary to once again strengthen the economy of Cyprus and therefore take hold of the future of your country in your own hands. I fully support you. The Eurogroup stands behind you and the measures that you are taking. The way you are fulfilling all the commitments from the program deserves our support. I think there will be difficult times ahead and yet also there will be a new prospective for the economy and therefore the people of Cyprus. The economy of Cyprus has shown to be dynamic and flexible, and therefore I am optimistic that Cyprus will recover within a short period of time, especially if I take into regard the steps that you are taking now. Those are necessary and will show and bring new perspective for Cyprus and its economy.”
IMF on Cyprus
The IMF Executive Board at a meeting on March 28, 2014 completed the third review of Cyprus’ performance under an economic program. IMF Managing Director and Chair Christine Lagarde said that: “The Cypriot authorities are to be commended for keeping program implementation on track, meeting their fiscal targets with significant margins, advancing fiscal structural reforms, and completing the recapitalization of the financial system. While the macroeconomic outturn in 2013 was better than expected, the outlook is challenging. Full and timely policy implementation, broad public acceptance, and continued support from Cyprus’s European partners remain critical to the program’s success.” Ms Lagarde also pointed out that: “Prudent fiscal policies have contributed to permanent budgetary savings and reduced the budget deficit. In light of persistent macroeconomic uncertainty, cautious budget execution will need to be maintained this year. The ongoing fiscal adjustment should be complemented by structural reforms to enhance the welfare system and protect vulnerable groups, modernize the revenue administration, further strengthen public financial management, and prepare state-owned assets for privatization.”
Further relaxation of capital controls
The Ministry of Finance announced on March 28, 2014 its decision to ease further the restrictive Measures imposed since last year’s bailout agreement. According to the Ministry the relaxations were deemed feasible following "the achievement of the milestones set out in the roadmap and the overall stabilization and restoration of confidence in the banking system."
Moody’s upgrades outlook on Cyprus and Cyprus banks
Moody’s ratings agency changed on March 22, 2014 the outlook on Cyprus`s Caa3 government bond rating from negative to positive, as a result of the better-than-expected economic and fiscal performances of the country in 2103 and the Cypriot authorities` track record of meeting conditions under the Troika funding program, which increases confidence that it will continue to benefit from this support. Moody`s has also raised the local and foreign-currency bond ceilings of Cyprus to Caa1 from Caa2, a move that reflects the reduced probability of exit from the eurozone. Furthermore, on March 27, 2014 Moody’s also upgrades three Cyprus banks; the Bank of Cyprus and the Hellenic Bank.