Roundup: Cyprus says it will not need new bailout to fund reunification agreement

Cyprus will not need a new bailout to fund a possible peace agreement reunifying the eastern Mediterranean island, President Nicos Anastasiades said on Thursday.

"I do not see why we will be forced into a new Memorandum of Understanding, taking into account that there will be transitional arrangements and safeguards built into the solution so there will not be economic oscillations," Anastasiades said.

He was speaking to journalists at a news conference on the occasion of Cyprus's exit from its three-year economic adjustment program.

Anastasiades was led into signing a messy bailout which pulled Cyprus back from bankruptcy in March 2013, just a few days after assuming office.

He said that in three years of an economic adjustment program the government managed to reverse a deep recession which accumulated a 13 percent drop of GDP and achieve a growth of 1.6 percent last year.

"The state and the economy of Cyprus three years ago were in a tragic situation and the government was called to manage an unprecedented economic crisis," he said.

He added that the government will continue in a decisive manner to implement the necessary economic policies to avoid the errors of the past which led to the economic crisis.

When asked whether financial assistance will be need to finance the reunification of the island, Anastasiades said that this will not be necessary, as there will potentially be huge benefits out of a settlement of the problem.

Anastasiades said the European Commission, the International Monetary Fund and the World Bank are preparing studies for the needs of a solution and possible sources of funding.

Anastasiades said that from day one of a solution the common currency of Cyprus will be the euro.

The eastern Mediterranean island became an EU member in 2004 as a whole and joined the Eurozone in 2008, but the European Acquis was suspended in the areas occupied by Turkish troops.

Anastasiades said that despite the successful outcome of the three-year austerity program there are still challenges ahead, most notably unemployment, despite the fact that it dropped by 4 points to 12.6 percent in February, year-on-year.

His press conference coincided with the publication of a report by the European Commission on Thursday which said that despite progress made by Cyprus there are issues which require immediate attention and further action.

These include the management of the high ratio of non-performing loans and the need to progress with the implementation of the insolvency framework and foreclosure laws and privatization of the Cyprus Telecommunications Authority (CYTA). Endit