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Pissarides: economy has absorbed the first shock

When was the last time Christopher Pissarides entered the Presidential Palace?

THE ECONOMY has absorbed the shock of the Eurogroup decision and is now on a path of improvement, said Nobel prize winner Christopher Pissarides yesterday.

Speaking after a meeting of the National Economic Council with President Nicos Anastasiades at the Presidential Palace, Pissarides said all the “burning issues of the Cyprus economy” were discussed during the meeting.

The council head said the meeting covered the troika’s presence on the island for a first evaluation of Cyprus’ commitment to the adjustment programme, agreed in exchange for a €10 billion bailout.

“Things are going as well as they could go under the circumstances, and generally, the economy is on track to recovery,” said Pissarides.

He added: “(The economy) has absorbed the first shock and is moving on. We see things getting better.”

Asked about the Bank of Cyprus coming out of administration, the Nobel winner said capital controls would now gradually be relaxed.

He warned against lifting restrictions all at once, giving as a possible timeframe “a relaxation (of capital controls) every six months for the next two years”.

Deputy government spokesman Victoras Papadopoulos said yesterday the president and council examined in depth implementation of the adjustment programme, current economic developments and the banking system, in light of the troika’s first evaluation of the Cyprus bailout programme.

The National Economic Council presented a number of proposals to the president, while its views and research will also be shared with the political parties very soon, he said.

According to Papadopoulos, during the meeting, participants noted “the promising stabilisation of the situation, which will push the economy out of the crisis”.

“It was also agreed that the faithful implementation of the memorandum is the only way for a quick exit from the crisis,” he added.

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