Fresh on the heels of passing its first budget since agreeing to a 10 billion euro ($13.7 billion) bailout to keep its economy and banks from collapsing, Cyprus was praised by one of its international lenders but cautioned the government to speed the pace of privatization.
International Monetary Fund (IMF) Managing Director Christine Lagarde said Cyprus has done a good job of sticking to reforms which she said will stabilize the financial sector and meet cost-cutting targets.
She was speaking just after the IMF approved the release of the next installment of bailout aid, amounting to $114 million (83.3 million euros) to the island’s troubled economy.
The IMF, along with the European Union and European Central Bank, make up the Troika who are providing the rescue funds, but those came with requirements Cyprus confiscate 47.5 percent of bank accounts over 100,000 euros and impose other austerity measures along with capital controls.
Lagarde called on the Cypriot government to speed up the privatization process. “While macroeconomic outcomes have been somewhat better than expected, the economic situation and outlook remain difficult and subject to significant risks,” she said in a statement. “Full and timely implementation of the adjustment program, as well as broad public support, is therefore crucial to restore confidence and growth.”
The IMF’s board said it had also approved Cyprus’s request to modify some performance criteria for the end of December, without specifying further, according to the IMF statement.