Its goals are to stabilise 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.
Press release
Tim Adams on CNBC: The broader impact of Cyprus, 1.4.13 © CNBC
© European Commission
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