PRESS AND INFORMATION OFFICE REPUBLIC OF CYPRUS FACT SHEET ECONOMY 14 September 2015

Mr Benoît Coeure, Member of the ECB Executive Board; Mr , Member of the ; Mr Jeroen Dijsselbloem, President of the and Mr Klaus Regling, European Stability Mechanism Managing Director during the press conference after the Eurogroup meeting. (Photo: Council of the European Union)

I Eurogroup approves updated MoU and issues statement on The full text of the Eurogroup statement on Cyprus Cyprus, reads as follows:

During the latest Eurogroup meeting in “The Eurogroup welcomes the successful Luxembourg on 12 September 2015, the EU conclusion of the seventh review mission in the Ministers of Finance of the Eurozone discussed context of Cyprus' macroeconomic adjustment how to reduce the high tax wedge on labour, the programme, which took place in July. The fiscal reform of the services sector in Eurozone developments continue to exceed expectations, countries, and the ongoing economic adjustment the financial situation of the banks is showing programmes in Greece and Cyprus. signs of gradual improvement and some progress has been noted on important growth- enhancing reforms. More specifically on Cyprus, Eurogroup officials spoke with warm words on the progress achieved by the Cypriot economy and agreed to The Eurogroup is encouraged that the economic endorse in principle the updated Memorandum recovery in Cyprus is gaining strength, the of Understanding as well as the disbursement of labour market showing signs of stabilization, the next tranche of financial assistance to although unemployment remains at a high Cyprus. level, and that the economy showed overall resilience in the past months.

ECONOMY ISSUE 4/2015 CYPRUS FACT SHEET

The Eurogroup recalls that addressing the The Eurogroup agrees to endorse in principle excessive level of non-performing loans remains the updated Memorandum of Understanding as a top priority for Cyprus in order to reignite well as the disbursement of the next tranche of credit growth and ensure that banks continue to financial assistance to Cyprus. We consider that improve their resilience. In this regard, we the necessary elements are now in place to stress the importance of an effective launch the relevant national procedures, paving implementation of the recently enacted the way to the formal approval by the ESM insolvency legislation and of the enhanced governing bodies of a disbursement of EUR 500 foreclosure framework, together with other million in October. Concurrently, the IMF measures adopted recently to speed up the Executive Board is expected to decide on the reduction of arrears. disbursement of about EUR 125 million.”

The determined pursuit of financial sector Commenting on the outcome through his Twitter reforms, including legislation to facilitate the account, the Finance Minister of the Republic of sale of loans, remains necessary to secure a Cyprus characterised the Eurogroup’s stance as decisive reversal of the non-performing loan positive and highlighted that the Eurogroup trend. notes that economic recovery is gaining strength. The Eurogroup commends the Cypriot authorities for the progress that has been made Moreover, the President of the House of to date, and calls on them to keep up the reform Representatives Yiannakis Omirou also momentum. The timely implementation of the welcomed the Eurogroup statement describing it growth-enhancing reform agenda, including as a positive development for the Cyprus privatisation and public administration reform, is economy, noting however that it was essential in order to restore Cyprus' growth accomplished due to the citizens` big sacrifices. potential, while safeguarding the protection of He also noted that the effort for further the most vulnerable groups. strengthening of the economy and social cohesion should continue.

The Minister of Finance Mr Harris Georgiades arriving at the Eurogroup meeting in Luxembourg on 12 September 2015. (Photo: Council of the European Union)

ECONOMY ISSUE 4/2015