By Constantinos Psillides
Cyprus could return to the international markets as early as the end of June, 18 months earlier than it was originally expected, Finance Minister Harris Georgiades said on Saturday.
“This is a very positive development for us. It’s a clear sign of trust towards our economy. Our liquidity will increase and we will be able to pull ourselves up,” Georgiades said, adding that the troika of lenders (European Commission, European Central Bank and the International Monetary Fund) has already green lighted this move.
Cyprus was shut out of international markets in May 2011 because of its oversized banks’ exposure to the Greek economy, and the lack of action to close fiscal gaps.
The administration sought an international bailout around two years later after burning through a €2.5 billion loan from Russia.
The island was granted a €10 billion bailout in March 2013 with an adjustment period of three years.
It did not expect to attempt a return to international markets before 2016 or late 2015.
Returning to the international markets is another step of good news. On May 30 the government decided to lift the last of domestic capital controls imposed right after the Eurogroup haircut while on May 15 the European Bank for Reconstruction and Development (EBDR) agreed to finance Cyprus. The island will benefit from EBRD operations until 2020 supporting the privatisation programme and assisting with corporate restructuring.
Also, last month Cyprus’s 10-year bonds were trading at an interest rate below the symbolically important 7.0 per cent threshold, the lowest since June 2011.
Combined with the positive troika evaluation of the adjustment programme, the Finance Ministry, according to Georgiades, decided to risk the island’s re-entry to international markets.
The Finance Ministry aims at securing at least €500 million.
While Georgiades hails this as a very positive development, he had no illusions about the island’s financial situation. “This is not a magic solution. We cannot just wave our magic wand and then everything would be alright again. There is still a lot that we need to do,” he concluded.
Published by: www.cyprus-mail.com
