Cyprus’ credibility will be tested early on, with the Eurogroup meeting on January 14, by which time Cyprus is expected to pass three bills on Cyta’s labour issues, national security issues, and the creation of Cyta Ltd private company.

In the meantime, the adjustment programme comes to an end in March 2016, regardless of whether Cyprus receives the last €400m instalment, which includes the amount of €200m intended for the recapitalisation of the co-op banks, plus money which will give a boost state funds to help the smoother running of 2016.

Another critical issue for 2016 is the ratings which Moody’s, Fitch, and Standard & Poor’s will give to Cyprus creditworthiness.

This will determine borrowing costs for Cyprus’ exit to the international market in 2016.

Cyprus needs three rating upgrades to exit junk (non-investment) rating so that it can benefit from the European Central Bank’s quantitative easing programme, aimed at economic growth within the Eurozone.

Source: InCyprus