ECONOMY

European Commission draft report says Cyprus adjustment on track

Cyprus is successfully carrying out the reforms necessary under its 10-billion-euro bailout program and will get the next tranche of financial help as planned, a draft report by the European Commission showed on Monday.

Inspectors from the European Commission, the European Central Bank and the International Monetary Fund – known as the troika – visited Cyprus in the second half of July to assess progress on strengthening public finances.

“Staff concluded that Cyprus’s economic adjustment program is on track,” said the draft report, obtained by Reuters.

The report, which must be approved by EU finance ministers, means the next tranche of aid – 1.5 billion euros from the eurozone’s bailout fund – will be disbursed.

The sum will not be in cash but in the form of bonds that will be used to recapitalize the island’s financial sector excluding the Bank of Cyprus, which has a separate restructuring plan, and Cyprus Popular Bank, which has been closed down.

The IMF will separately disburse the next 86-million-euro tranche of its share of the bailout.

[Reuters]