The IMF arranged to loan Cyprus a total of €1bn as part of the bail-out plans. This was given in conjunction with a €9bn emergency sum donated from the European Stability Mechanism (ESM).
David Lipton, the deputy IMF head said during a meeting to the board of Directors that the loans given to Cyprus’ continues to produce positive results for the economy in general. Economic and fiscal results have increased at an improved growth rate, with the figure turning positive during the first quarter of this year, with public spending exceeding targets, he stated.
Credit liquidity and solvency in the banking system have been amended, allowing for the cross country payment restrictions to be lifted. For the future, it still remains important to maintain reform pushes in order to keep the momentum of such positives.
On the subject of non-performing loans (NPLs) the figure for the island still remains high, and remains a priority to reserve general stability and boost job creation. Regarding NPLs, the adoption of the new insolvency and foreclosure legislation is crucial. Furthermore, Mr Lipton noted that continued efforts are needed in order to strengthen the banking sector and to increase capacity; more attention should be given to restructure loans in a sustainable manner.