REHN – ECONOMY – CYPRUS

The economy of Cyprus has overall sound fundamentals, EU Commissioner for economic and monetary affairs, Olli Rehn has said.

Speaking Friday in Brussels, Rehn said that Cyprus needs to make urgent reforms but denied that its economy was too exposed to Greece.

“Cyprus has overall sound fundamentals. While the Cypriot banking sector is large in size relative to the economy, Cypriot banks are well-capitalised and supervised”, he said, according to the European Voice.

He expressed the view that any private-sector involvement in bailing out Greece would have a manageable impact on the Cypriot banking sectors.

Rehn said that domestic banks have sufficient capital buffers to absorb expected losses, while the impact on subsidiaries of Greek-owned banks in Cyprus has also been foreseen in the new programme for Greece.