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Cyprus

Eurozone ministers briefed on financial aspects of solution

Eurogroup president Jeroen Dijsselbloem

Finance Minister Harris Georgiades on Monday briefed his Eurozone counterparts about the state of play in the island’s reunification process, focusing on economic and financial issues.

Eurogroup president Jeroen Dijsselbloem said members of the euro area learned about the positive economic effects the process may have.

“But (members also) realised that adequate and effective preparation, in view of the ground that remains to be covered, is very important,” he told reporters after the Eurogroup meeting.

Dijsselbloem added that there was a lot of work ahead “if and when that process becomes successful in the coming months”.

On the state of the island’s economy, the Eurogroup president welcomed the positive reports of strong economic recovery.

He said good work had been done by the Cypriot authorities, including in the financial sector, but struck a note of caution over the high rate of non-performing loans.

“We also took note of the still very high stock of NPLs and possible risks to fiscal outlook.”

He said the Eurogroup hoped that Cypriot authorities would continue their efforts to tackle the issues and keep up the structural reform effort.

Cyprus’ economy is expected to grow by around 2.0 per cent in 2016, from 1.9 per cent the previous year.

Banks however are still struggling with NPLs, despite their reduction in recent months.

The ratio to total loans stood at 48 per cent in August 2016, up from 45 per cent at end-2015.

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