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EU Commission says Cyprus’ ‘hard-earned achievements’ at risk

A 2017 demonstration against CyTA privatisation

The European Commission said that while structural reforms carried out in recent years have helped Cyprus exit recession, the “weakened” reform momentum undermines the economy’s future growth prospects as pressure to increase spending rises and the reduction of bad loans remains slow.

“It is crucial to safeguard and build upon these hard-earned achievements,” the European Commission said in a statement on its website on Friday night, a year after Cyprus completed its adjustment programme. “The increased expenditure pressure should be resisted, allowing for the creation of fiscal space for growth-enhancing public spending”.

The statement came hours after a delegation of European Commission technocrats completed its second post programme surveillance mission in liaison with the European Central Bank (ECB) and in coordination with the International Monetary Fund (IMF). The delegation of the former troika was accompanied by officials of the European Stability Mechanism (ESM), which financed the Cypriot bailout with €6.2bn over 2013 to 2016.

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