At the end of March the Cyprus economy, its fiscal reforms and the financial system will go through the standard tests of the Commission and European Central Bank which are conducted every six months.
The test will take place during a period where Cyprus saw a marginal surplus of 0.1% of GDP, the GDP growth rate reached 2.8% and the credit rating upgrade from Standard & Poor’s has Cyprus one step from the investment grade.
It should be noted that it is a goal of the Finance Ministry that Cyprus enters the international markets in 2017 to draw €750 million.
The international creditors will be conducting their tests in the shadow of the disagreement between Finance Minister Harris Georgiades and the European Commission over the latter’s projections for Cyprus’ 2017 fiscal targets.
In its last report, the Commission saw large imbalances in the Cyprus economy, questioning the sustainability of its growth.
The European Commission considers that, based on the country’s draft budget for 2017, Cyprus’s structural position will deteriorate, an assessment which the Finance Ministry disagrees with.