Roundup: Eurogroup allows Cyprus to exit economic adjustment program

Eurogroup finance ministers meeting in Brussels on Monday signaled Cyprus was free to exit a three-year economic adjustment program that began in March 2013, Cypriot Finance Minister Harris Georgiades said.

"Cyprus is out of a memorandum," Georgiades wrote on social media shortly after the Eurogroup meeting.

"We continue the effort away from populism and the disastrous mistakes of the past to consolidate growth," he told journalists in Brussels.

Cypriot President Nicos Anastasiades, also in Brussels for an emergency EU summit on the migration crisis, tweeted: "The last memorandum Eurogroup on Cyprus. Three years of work and consistency. We go on with seriousness."

Georgiades presented to the Eurogroup meeting a report on Cyprus' current economic situation and progress in implementing reforms and complying with requirements under its bailout memorandum.

He said Cyprus would proceed with all reforms provided for by its economic adjustment program that are still pending.

The only issue pending is turning state-owned Cyprus Telecommunications Authority into a private company under private law, entirely owned by the government.

Steps to turn the public organization into a private corporation were refused by opposition parties which are in the majority in parliament.

This was the only blemish on an otherwise bright picture described in Georgiades' report to his Eurogroup colleagues.

Cyprus belied all initial doomsday projections by its troika inspectors -- the European Commission, the European Central Bank and the International Monetary Fund.

Georgiades said in his report that the public debt is estimated to have declined to 91 percent of GDP by 2020, 9 points below the troika predictions.

Despite the end of the program, Cyprus will continue to be under surveillance by its lenders, who will carry two bi-annual inspections of its economy until it repays 75 percent of the 10 billion euros (11 billion U.S. dollars) of economic assistance it received.

Lenders will insist on primary budget surpluses ranging from 2.4 percent this year to 4 percent in 2018.

Economic analysts say the crunch for Cyprus will come in 2019, when large debt amortizations begin. They also say that the government has to work to achieve investment grade ratings that would lower the cost of borrowing from international markets.

This means a continuation of prudent economic and fiscal policy, analysts said. Endit