NICOSIA – Cyprus’ Finance Minister Harris Georgiades said an economic slide caused by bad decisions by banks is slowing and an improvement is showing.
“The long recession seems to have run its course,” Harris Georgiades told a conference in Nicosia.
Cyprus was rescued in March of 2013 with a 10-billion euro bailout from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that came with attached austerity measures and bank account confiscations.
Quarterly data for the past four quarters showed the depth of recession was losing steam, Georgiades said. “There has been stronger than expected resilience of main productive sectors of the economy and confidence has been re-established,” he said, according to Reuters.
Georgiades said the bailed-out island expected to achieve a marginal primary fiscal surplus and would exit an excessive deficit procedure two years earlier than scheduled.
Cyprus has previously said it expects a recession this year to be narrower than 3 percent, revised substantially downwards from a contraction close to 4 earlier in the year. The island and the Troika expect it to return to modest growth of 0.5 percent in 2015.
Unlike other bailout nations, aid to Cyprus was contingent on the island shutting down a major loss-making bank and forcing depositors in another bank to shoulder the cost of recapitalizing the lender by seizing deposits.
Despite promises by President Nicos Anastasiades to hold them accountable, no banker has been disciplined for management decisions to buy huge amounts of Greek bonds that were devalued, and bad loans to Greek businesses which failed, costing the institutions 4.5 billion euros in losses.