Georgiades Says Cyprus Making ‘Good Progress’ Before Aid Review

Cypriot Finance Minister Haris Georgiades expressed optimism about the first review later this month of the government’s progress in meeting budget-austerity conditions tied to the international rescue of the country.

“We are doing good progress,” Georgiades told reporters today in Brussels before a meeting of euro-area finance ministers. “Cyprus has already implemented some very hard, but necessary, decisions. And that’s how we shall proceed.”

Cyprus in March received a 10 billion-euro ($13 billion) rescue from the euro area and the International Monetary Fund in return for forcing losses on uninsured depositors in the country’s two largest banks. The government imposed capital controls as it resolved the second-biggest lender, Cyprus Popular Bank Pcl.

Cyprus is seeking leeway under its rescue because of concerns about the impact on the domestic banking industry. Cypriot President Nicos Anastasiades said in a June 6 letter to the European Commission that the aid package imposed losses on depositors “without careful preparation,” creating “pressing issues that need to be addressed.”

Georgiades alluded to these issues in his remarks today.

“Practical difficulties and side effects arising from the implementation of the program, especially when it comes to the banking sector, will be dealt with in a collaborative way together with our partners,” he said.

Georgiades joined Anastasiades and Cypriot Central Bank Governor Panicos Demetriades for a July 3 meeting in Frankfurt with European Central Bank President Mario Draghi.

“It was a very useful meeting,” Georgiades said today. “All issues were raised and discussed. And this contact will continue.”

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