The economic crisis has prompted intense and sustained action by the EU's national governments, the European Central Bank and the Commission. All have been working closely together to support growth and employment, ensure financial stability, and put in place a better governance system for the future.
The Eurogroup has reached an agreement with the Cypriot authorities on the key elements necessary for a future macroeconomic adjustment programme. This agreement is supported by all euro area Member States as well as the three institutions. The Eurogroup fully supports the Cypriot people in these difficult circumstances.
The programme will address the exceptional challenges that Cyprus is facing and restore the viability of the financial sector, with the view of restoring sustainable growth and sound public finances over the coming years.
Since the autumn of 2011, the possibility of assistance to Cyprus under a programme has been under discussion by the Cypriot authorities with the Commission. In July 2012, Cyprus formally asked for assistance under a programme. The need for assistance comes essentially from problems in the Cypriot banking sector which was unsustainably large for the size of the Cypriot economy. However, it was not possible to conclude negotiations on a programme with the previous Cypriot government.
The Eurogroup welcomes the political agreement reached with the Cypriot authorities on the cornerstones of the policy conditionality underlying a future macroeconomic adjustment programme.
Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) visited Lisbon during February 25-March 14 for the seventh quarterly review of Portugal’s economic adjustment programme. Programme implementation remains broadly on track, against the background of difficult economic conditions. The end-2012 fiscal deficit target was met, financial sector stability has been safeguarded, and a wide range of structural reforms is progressing. As during previous reviews, policy choices and implementation of the programme were re-evaluated in the light of the new circumstances.
Staff teams from the European Commission, the ECB and the IMF have conducted discussions with the Greek authorities during the last two weeks regarding the review of Greece’s economic program. Significant progress has been made but a few issues remain outstanding. As additional technical work will be necessary to settle these issues, the mission will take a short break to allow this work to be completed. The mission plans to return to Athens in early April to continue its work.