Troika on Cyprus: Doing What it Should, and in Trouble Anyway

by Matina Stevis

Wall Street Journal
September 18, 2013

Remember Cyprus? Where it all almost fell apart last spring.

Well, today it got its first review from the troika of experts –the European Commission, the European Central Bank and the International Monetary Fund- and it contains some good news.

Or, to be more accurate, as an European Union official who briefed on the review told reporters: ““When I say it’s positive, I mean it’s not worse than expected.” That’s actually not true in the case of unemployment, where the commission sees worse-than-projected rates.

The key message from the IMF and the EU/ECB reports is that the Cypriot government is in fact doing what it’s meant to be doing in terms of cutting its spending –usually the hardest part of a bailout program. But financial-sector reforms it’s agreed to may not be enough to contain the fallout from the radical restructuring of its banking sector.

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Read the Report (PDF)