Georgiades says reforms the only road leading to better ratings


By Stelios Orphanides

Finance Μinister Harris Georgiades said Cyprus should remain on the course of economic reforms and fiscal prudence to help it regain its investment grade sovereign rating and reduce its borrowing costs, the Cyprus News Agency reported on Friday.

The drop in borrowing costs for the government would “free valuable resources,” Georgiades was quoted as saying.

The government intends to keep the course unchanged and “continue the reform effort with the same intensity, and prudent fiscal management, to create the basis that will push the economy forward,” Georgiades said.

“Rating companies that are monitoring and evaluating us, were clear on which steps they expect us to take that will lead to an upgrade,” he said.

Cyprus, with a highest rating set in September by Standard & Poor’s at BB-, which is three notches below investment grade, paid a total of €543.6m to service its debt in 2015, accounting for 8 per cent of government spending.

The island paid €466.3m in 2014. Government debt stood at €18.6bn at the end of 2015 compared to €18.5bn a year before.The B1 rating assigned to Cyprus by Moody’s Investor Service and B+ by Fitch ratings are both four notches below investment grade.

The secondary market yield of the 10-year bond issued by the Cypriot government in October was 3.91 per cent on Friday, compared to the 0.15 per cent of respective German securities, according to a Bank of Cyprus document.

Rating companies repeatedly linked a further upgrades to a drop in the stock of non-performing loans in the banking system, the continuation of reforms, agreed with international creditors as part of Cyprus’s 2013 bailout -which include privatisations, an anathema for the populist opposition- and stronger growth. Cyprus completed its adjustment programme in March after its economy and budget performed better than expected.

“We left the recession behind us, the economy is growing, we see that unemployment is also registering a considerable drop, the highest pace in Europe,” Georgiades said. He added that while “we have stabilised the banking system and public finances,” a further drop in non-performing loans, roughly half of loans in the banking system, are expected to drop considerably.

“I believe these two problems, high unemployment and level of non-performing loans, are going well, provided this course is not disrupted,” Georgiades said 17 days before Cypriots elect a new parliament.

Cyprus lost its investment grade rating in June 2012 after effectively being shut out of markets in May 2011. Georgiades oversaw Cyprus’s return to financial markets with three bond issues in 2014 and 2015 at yields below 4.5 per cent.


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Stelios Orphanides is a journalist at To contact Stelios Orphanides: [email protected]

  • Jeremy Rigg

    Some hope, Georgie Boy

  • konstabo

    everythings going wonderful for me and my kind said georgiadis…..thanks to peoples savings that we were able to tap into in order to save ourselves from bankruptcies….that would be like me running up a big tab at the betting shops and eating out every night at restaurants plus visiting night clubs to party and after i go bust i just simply slip into my neighbors house at night while his asleep dip my hand into his wallet and take all his money to save myself while i leave him broke….ofcourse everythings going good for george while people are struggling to pay there bills and make ends meet….and whats more he and his pals aint planning on giving anything back , not even the interest on the money they took to save themselves from all there incompetent management of the economy at the expense of others….

    • He inherited the problem had little part in it. But i get the general feeling in your comment. These people are detached from the reality on the ground outside of their utopian public sector.

      • konstabo

        your right not directly there fault , i always tell this same old story as an anecdote to describe what happened , its far more complexed and lots more players involved , still you cant just blame the other administration , they all played a part including the EU who decided to rob bond holders….they all played a part to bring us to this point of desperation where our money got lost and a lot of people had to suffer….
        so now all we are suggesting is that they try to rectify this problem by adleast returning some of the money (adleast half ) over a long period of time , even the interest on that money would suffice because as we all know in a capitalist system its all based on money , you cant do anything with out money and alot of people close to retirement and in need of medical , oh by the way the medical system in europe is socialist and we ofcourse prefer privatized medical care since the rush for privatization of everything…..

    • disqus_ZPlOdQqScB

      He did indeed inherit this-look to the previous lot to see who’s at fault.

    • Slomi

      well said.

  • Stewie

    Don’t forget the money you owe to people with bail-in, the recovery should start there.
    Same goes with social insurance.

  • Bernard Smart

    keep doing what we said we would – reform and privatise – all will be well !
    you have not done very much at all except stealing peoples life savings !
    investment grade – dream on !