Cyprus Mail

Seven downside risks threaten Cyprus’s programme, EU Commission says

The finance ministry in Nicosia

By Stelios Orphanides

The European Commission said that Cyprus’s success in meeting specific targets set out in its adjustment programme may face a number of internal and exogenous risks.

These include a likely delay in the restructuring of the non-performing loan stock in the Cypriot banking system, which make out roughly half of the loan portfolio, the European Commission said in its seventh programme adjustment progress review. A low pace of restructuring non-performing loans “could lead to a slower than expected return of confidence in the banking sector, and thereby call into question the sustainability of the stabilisation of the banking system,” the Commission said.

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