IMF hails Cyprus decision to cut short bailout program

International Monetary Fund chief Christine Lagarde praised Monday Cyprus's decision to end its bailout program two months early after the eurozone country regained its financial footing.

The IMF's part of the IMF-European Union rescue program was due to expire on May 14. Cyprus also ended its loan program with the European institutions slightly early; it was supposed to expire this month.

In March 2013, after its banking sector collapsed, Cyprus negotiated a 10-billion-euro ($13 billion at the time) aid program from the IMF, the European Commission and the European Central Bank.

In exchange, the so-called troika of international creditors demanded the government undertake tough austerity measures and restructure the banking system, which was widely exposed to Greece's debt.

Lagarde said she had received a letter from Harris Georgiades, the Cypriot finance minister, informing her of the government's decision to cancel the loan arrangement, effective March 7.

"I wish to congratulate the people and the Government of Cyprus on their accomplishments under the economic adjustment program, which has delivered an impressive turnaround of the economy during the past three years," Lagarde, the IMF managing director, said in a statement.

"The banking system is on a much more solid footing and workouts of nonperforming loans are accelerating, opening space for new productive lending," she noted.

"The fiscal position has been restored to a sustainable path, and public debt is now firmly on a downward trajectory," she added, pointing out the eurozone country had regained access to international capital markets and successfully issued three Eurobonds during the past 21 months.

[AFP]