Finance minister Harris Georgiades said that last year’s growth rate suggests that Cyprus, which will continue its reform effort and maintain fiscal discipline even after it exits the direct supervision of its international creditors, is on the right track.
“In this way we shall fully re-establish investor confidence and we shall keep Cyprus firmly on the track of recovery and growth,” he told reporters in Nicosia on Thursday at the signing ceremony of €150m government guarantee agreements for loans to Cypriot banks from the European Investment Bank to finance small and medium size enterprises. “This very successful scheme of financing of small and medium size enterprises and mid-caps (middle-capitalisation companies), which we have inaugurated a year and a half ago, has been instrumental in lifting our economy out of the long recession of the previous years. The growth rate of 1.6 per cent achieved during 2015 shows that we are on the right track”.
Georgiades’ comments came an hour after the chairman of eurogroup, the euro area finance minister conference, praised Cyprus’s reform performance saying that the island “will be able to stand on its own feet again”.
Jonathan Taylor, European Investment Bank’s vice chairman, who signed on the agreements behalf the agreement, said that while the Cypriot economy, which exited a prolonged recession last year, “has been showing positive signs over recent months” but still faces challenges.
“The European Investment Bank will continue supporting worth-while investments that can help bring back growth and development, further improving Cyprus’ economic situation,” Taylor said, adding that the lender made available to Cyprus a total of €1.3bn in financing in the past five years and financed projects in Cyprus worth €215m in total in 2015 alone.
The amount is broken down to €115m for loans to small and medium size enterprises and a further €100m in credit facilities for public infrastructure projects, including transport, energy, waste treatment and water supply, Taylor said.
The agreements provide for a total of €100m in guarantees for loans by Bank of Cyprus and further €50m by RCB Bank, Cyprus Development Bank (CDB) and USB Bank.
“I am happy to be in the position to welcome today to the scheme three new partners, Cyprus Development Bank, RCB Bank and USB Bank, increasing the number of partner banks to ten,” Taylor said. “Bank of Cyprus has been a very reliable partner for European Investment Bank over the past 18 months and I would like to thank the management of the bank for their collaboration”.