Cyprus exits bailout as Greece demands debt relief

Cyprus has become the fourth euro zone country to exit an EU-IMF bailout programme, as euro zone finance ministers gave a green light to the country to exit its programme without a follow-up fund.

A joint statement by euro zone finance ministers, released after a eurogroup meeting in Brussels on Monday, said the eurogroup “supports the Cypriot government’s decision to exit its macroeconomic adjustment programme without a successor arrangement”.

The country will officially exit its programme at the end of the month.

IMF managing director Christine Lagarde also issued a statement congratulating Cyprus on "an impressive turnaround of the economy during the past three years".

The Mediterranean country was forced into a €10 billion bailout in March 2013, after its banking sector faced collapse, partly as a result of its large exposure to Greek debt.

With Greece also dominating the agenda at Monday's eurogroup meeting, euro zone finance ministers agreed that bailout monitors may return to Athens as early as Tuesday, as negotiations continue on reform measures demanded by creditors as part of Greece's €86 billion bailout programme.

Amid divergences between the IMF and the European Commission over the scale and range of measures needed to be undertaken by Greece, eurogroup chairman Jeroen Dijsselbloem said there was "enough common ground" between all parties to recommence the bailout missions, which stalled last month.

Reforms

But speaking after the eurogroup meeting, he warned that Greece needed to deliver more in terms of reforms if the first review was to be completed.

On Greece’s demands for debt relief, he said there was “a strong link” between implementation of the agreed reforms under the programme and talks on debt relief. “We have agreed there should be fiscal targets and pension reform, so fiscal sustainability long-term will be part of debt discussions,” he said.

The IMF has not yet committed to participation in the third Greek bailout agreed last summer, though its involvement is seen as essential by many euro zone member states.

Asked about the state of play regarding the Greek bailout ahead of the eurogroup meeting, Minister for Finance Minister Noonan said there was a divergence in terms of the numbers being presented by the key creditors.

“It depends on which set of figures you look at. If you look at the Commission’s figures, Greece is not in a bad position, but if you take the IMF view of things, Greece needs to do more,” he said.