Debt inspectors to Cyprus: Keep up the reforms

International creditors praised Cyprus on Wednesday for meeting the terms of its financial rescue but warned that the country mustn’t slacken the pace of reforms to restore market confidence.

Six months after an acute economic crisis that saw its banks close their doors for around two weeks, the small island nation in the eastern Mediterranean is dependent on loans from its creditors, including the International Monetary Fund, in order to pay the bills.

In a conference call with reporters, Delia Velculescu, the IMF’s mission chief for Cyprus, said the country has made “good progress” in meeting the fiscal targets outlined in the bailout deal.

However, she said lingering uncertainty over the economy, especially over a shaky financial system, mean authorities mustn’t waver in their plans to streamline the public sector, improve tax collection and sell state companies.

“With large uncertainty and downside risks, fiscal prudence and strong and timely policy implementations remain critical for the program’s success,” Velculescu said from her base in Washington DC.


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