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 Cyprus has to comply with the conditions of the bailout program to
get each installment of the bailout fund over the course of three
years.
Cyprus came to the brink of bankruptcy last March, when it faced a
cash crunch from years of fiscal slippage and a banking system
deeply exposed to losses in Greece. As part of a 10 billion euro
($13.7 billion) aid package from the IMF and the European Union,
Cyprus was forced to shut down one of its largest banks and have
bank deposits in a second bank seized to recapitalize it.
To get the bailout funds, the government promised to cut spending
and privatize the state telecoms, electricity and ports authorities.
IMF Managing Director Christine Lagarde said Cyprus has done a good
job of sticking with the program of reforms, stabilizing its
financial sector and meeting budget-cutting targets. But she called
on the 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."
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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 on Friday.
(Reporting by Anna Yukhananov; editing
by Bob Burgdorfer and Peter Galloway)
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