Moscovici: Cyprus a bailout success model
Cyprus is a model of bailout success, said EU Commissioner for Economic and Financial Affairs, Taxation and Customs Union Pierre Moscovici in an interview with the Cyprus News Agency.
Moscovici noted the Cypriot economy's remarkable progress following 2 years of an adjustment programme implementation.
'I was there in 2013 when we had some dramatic decisions to make' he added. 'Cyprus has become an example to follow rather than one to avoid and I think this is quite an achievement given the situation it faced'. Now, he stressed, the island needs to stay the course of reform for the remainder of the programme and beyond.
The Commissioner referred to the recapitalisation of the banking system, the lifting of capital controls and putting public finances back on track, which has helped Cyprus, as hesaid, tap into international bond markets.
Moscovici advised against an early exit from the programme which he dubbed 'a protection for Cyprus', further pointing out that more needs to be done in terms of reforms, such as privatisations and restructuring the civil service.
He also opposed the creation of an Asset Management Company, a so-called bad bank as means of solving the dramatic level of non-performing loans.
“Tackling the NPLs rate is vital to enable banks to start lending the economy, whlle borrowers and banks need to work out debt restructuring agreements,” he said.
Moscovici noted said that Cyprus will not be using all €10 billion from its financial assistance package, due to “impressive fiscal performance” and banks covering their projected capital shortfalls without resorting to the €2.5 billion earmarked for bank recapitalisation.
“We now estimate that Cyprus’ financing needs are lower than expected at the onset of the program,” Moscovici concluded.