Press Release No. 16/94

Press Release: Statement by IMF Managing Director Christine Lagarde on Cyprus

March 7, 2016

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), issued the following statement on Cyprus today:

“I have received a letter from Mr. Harris Georgiades, the Minister of Finance for Cyprus, informing me of his government’s decision to cancel the Extended Fund Facility (EFF) arrangement, effective March 7, 2016. The Fund’s 36-month EFF arrangement was scheduled to expire on May 14, 2016.

“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. The economy returned to positive growth last year, expanding by about 1.5 percent. The banking system is on a much more solid footing and workouts of nonperforming loans are accelerating, opening space for new productive lending. The fiscal position has been restored to a sustainable path, and public debt is now firmly on a downward trajectory. In addition, Cyprus regained access to international capital markets and successfully issued three Eurobonds during the past 21 months.

“Building on these achievements, the reform momentum must continue, especially in view of the renewed volatility in global financial markets. Further improving fundamentals and sustaining efforts to strengthen the resilience and flexibility of the Cypriot economy are essential to ensure that the legacies of the financial crisis are left far behind. I am therefore encouraged by the authorities’ commitment to maintain prudent macroeconomic and fiscal policies and to continue promoting structural reforms.”