Cyprus gets next IMF aid installment under bailout
Credit: Reuters/Yuri Gripas
The International Monetary Fund (IMF) logo is seen at the IMF headquarters building during the 2013 Spring Meeting of the International Monetary Fund and World Bank in Washington, April 18, 2013.
Cyprus has to comply with the conditions of the bailout program to get each installment of the bailout fund over the course of three years.
Cyprus came to the brink of bankruptcy last March, when it faced a cash crunch from years of fiscal slippage and a banking system deeply exposed to losses in Greece. As part of a 10 billion euro ($13.7 billion) aid package from the IMF and the European Union, Cyprus was forced to shut down one of its largest banks and have bank deposits in a second bank seized to recapitalize it.
To get the bailout funds, the government promised to cut spending and privatize the state telecoms, electricity and ports authorities.
IMF Managing Director Christine Lagarde said Cyprus has done a good job of sticking with the program of reforms, stabilizing its financial sector and meeting budget-cutting targets. But she called on the government to speed up the privatization process.
'While macroeconomic outcomes have been somewhat better than expected, the economic situation and outlook remain difficult and subject to significant risks,' she said in a statement.
'Full and timely implementation of the adjustment program, as well as broad public support, is therefore crucial to restore confidence and growth.'
The IMF's board said it had also approved Cyprus's request to modify some performance criteria for the end of December, without specifying further, according to the IMF statement on Friday.
(Reporting by Anna Yukhananov, editing by Bob Burgdorfer and Peter Galloway)
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