THE European Stability Mechanism (ESM) approved on Thursday the disbursement of €100m to Cyprus, following the positive assessment of the sixth quarterly review of the macroeconomic adjustment programme and approval of the supplemental memorandum by the ESM board.
ESM Managing Director Klaus Regling said he was pleased that Cyprus’ adjustment programme “is back on track.”
“The legal framework for a new foreclosure procedure has entered into force, and there has been a substantial reform of corporate and personal insolvency laws. These new regulations enable the country to effectively deal with the problem of non-performing loans. I trust that the government will continue its reform efforts so that Cyprus can sustain economic recovery,” he said.
According to Regling, progress in Cyprus confirms that “with strong ownership by a government our approach to grant a loan in exchange for economic policy conditions works”.
This has also been demonstrated by the successful programme conclusions in Ireland, Portugal and Spain, he added.
The current disbursement will bring the total amount of ESM financial assistance to Cyprus to €5.8bn out of the €9bn available under the approved programme.