Remarks made in the sixth Post Programme Surveillance Mission (PPS) made to Cyprus this week by the international lenders that the island needs to continue with reforms are absolutely correct and confirm the wider orientation of the President and the government, Government Spokesman Prodromos Prodromou said on Sunday.
Officials from the European Commission, the European Central Bank and the International Monetary Fund (IMF) visited the island from Monday to Friday to review how suggestions made during its last visit to the island had progressed.
Prodromou said important conclusions can be drawn from the assessment and the remarks made in it.
In general, he noted, the report refers to the huge progress of the Cypriot economy. “As it is noted, despite some signs of fatigue in the international economic environment, Cyprus stands out in 2019 with a strong growth of 4%”.
Prodromou added that it’s high time reforms in the public sector and local government moved on. It is also important, he said, for the government’s proposals on the improvement of the investment environment to be approved.
“As the report of the supervisory authorities notes, the reform promoted by the government in the judicial system is also of great importance, while the implementation of the national health system towards which the government proceeds with consistency, is also of paramount importance” said the spokesman.
He stressed, however, that non-performing loans remain a big challenge for the economy. “Therefore, efforts need to be continued, while we must be aware that the volume of problematic loans is not just an issue of government policy, but a matter that depends on and must be addressed by the political system as a whole and the society more widely”.
The economic adjustment programme (EAP) for Cyprus was formally agreed in May 2013. In March 2016, Cyprus exited its three-year EAP, which included an ambitious reform agenda.
Cyprus is now subject to post-programme surveillance until at least 75 per cent of the financial assistance received has been repaid. If no early repayments are made, PPS may last at least until 2029.
The objective of PPS is to measure Cyprus’ capacity to repay its outstanding loans to the European Stability Mechanism.