Cyprus intends to sell debt for a second time this year in order to exit its international rescue program before it was officially planed, Cypriot President Nicos Anastasiades revealed today in an Milan interview, on the sidelines of the European Union-Asia Summit Meeting, brushing off a slump in Greek bonds.
“What we want is, through adhering to our commitments, to achieve an exit from the bailout program at the earliest time possible,” Anastasiades said adding that “Greece and Cyprus are two dissimilar cases.”
More than a year after Cyprus became the fifth euro-area nation to enter an international bailout program in exchange for unpopular budget cuts, it is now seeking to bolster market confidence. Earlier this week, the risks of an early rescue exit were highlighted in Greece, triggering a selloff in its bonds and stocks by pushing to leave its own program of financial support, Bloomberg reported.
Over the past month, the Greek government has said it wants to leave its program later this year, more than a year ahead of schedule, but other euro-area governments expressed concerns about the plan this week. Greece has received around half of the total 496 billion euros in aid pledges for the rescued euro-area nations. Anastasiades said the Cypriot government aims to end its rescue, which was scheduled to last until 2016, at some point next year, although he declined to be more precise about the timetable. The Cypriot President said the priority is to bolster the government’s credibility by fulfilling the current aid conditions, including the “outstanding” matter of the foreclosure rules.
A disagreement on foreclosure legislation with the euro area and the International Monetary Fund (IMF), which co-finance the Cypriot rescue program, could be settled by early November, paving the way for the next aid disbursement to the country, said the President. This is holding up the current European-IMF review of Cyprus’ progress under the bailout.
Regarding the further selling of debt, Anastasiades underlined that Cyprus would already be at that stage if there was no delay on the outstanding foreclosure legislation, while at the same time he appeared optimistic that Cyprus would sell bonds right after the completion of any European-IMF review “as long as market conditions permit.” He also predicted that any difficulties resulting from European stress tests (the results of which are expected on October 26) on Cypriot banks would be “manageable.”