The Cypriot authorities have put forward a multi-annual reform
programme to address the economic challenges facing the country. Its
goals are to stabilize the financial system and achieve fiscal
sustainability in order to lay the foundations for a recovery of
economic activity and the growth potential that will preserve the
longer-term prosperity of the population.
The programme builds on important steps already taken by Cyprus to
address the problems in the two largest banks and includes a set of
measures aimed at ensuring a stable, sustainable and transparent
financial sector.
While the Cypriot government has already adopted important fiscal
consolidation measures, the programme entails a well-paced fiscal
adjustment that balances short-run cyclical concerns and long-run
sustainability objectives, while protecting vulnerable groups. The
social welfare system will be reviewed with the view to ensuring
sustainability and social fairness.
The programme puts forward comprehensive structural reforms to set the conditions for growth and job creation.
Significant challenges lie ahead for Cyprus. The European Commission
and the International Monetary Fund stand by Cyprus and the Cypriot
people in helping to restore financial stability, fiscal sustainability
and growth to the country and its people.
