Cyprus Mail
Cyprus

Government delay led to bailout

Cyprus was forced to seek an international bailout because the government delayed austerity measures, the head of the Finance Ministry’s economic research and EU affairs directorate told an inquiry on Friday.
Andreas Charalambous said that he had been asking the government to take action to fix fiscal and structural problems from February 2010, more than two years before Cyprus finally asked for an EU/IMF bailout in June 2012.
Some measures were put in place later but ultimately they were not enough.
Cyprus was shut out of international markets in May 2011 because of its oversized banks’ exposure to the Greek economy, and the lack of action to close fiscal gaps, Charalambous said.
From then on, it was a one way street to a bailout, he said, adding that the political leadership delayed seeking a bailout because it believed a memorandum would entail “socially and politically unacceptable” terms.

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