Cyprus will return to financial markets before the end of its bailout program in 2016 and should require no more funds from international lenders, the country’s President Nikos Anastasiades told a German newspaper on Friday.

“I am certain that before the end of the program in 2016 we will be able to go to financial markets again,” Anastasiades was quoted as saying by German daily Handelsblatt.

“I hope we will see first signs of a turnaround in the second half of 2014,” he added.

Cyprus became the fifth eurozone country requiring international rescue earlier this year.

Its banks exposed to Greece, it was teetering on the brink of a financial meltdown, hammering large depositors at the island’s two largest banks with losses and prompting a 10 billion euro ($13.22 billion) bailout package in March.

Lenders from the European Union, the European Central Bank (ECB) and International Monetary Fund (IMF), known as the troika, expect Cyprus’ 17-billion-euro economy to contract by 8.7 percent this year and 3.9 percent in 2014.

“If we stick to budget discipline and use our possibilities, we won’t need further loans,” Anastasiades said, adding that the danger of sovereign bankruptcy was now finally averted.

Cyprus enforced capital controls on March 29 to prevent a flight of cash from its banks. Although restrictions have been eased, there are still limits on cash withdrawals, cheque transactions and on large cash movements.

Under the bailout terms, Cyprus shut down one insolvent bank, Laiki, and forced big depositors to contribute towards recapitalizing a second, Bank of Cyprus. [Reuters]

Leave a Reply