EBRD to temporarily aid bailed-out Cyprus

WARSAW, May 15 (AFP): The European Bank for Reconstruction and Development (EBRD) will begin investing in Cyprus to assist the bailed-out eurozone nation to recover from "severe economic crisis", it said Thursday.
The EBRD's board of governors, representing the bank's 66 shareholders, took the decision on the final day of its annual meeting in Warsaw following a request from Cyprus for financing.
EBRD investments up until 2020 will complement Cyprus' international bailout programme that is worth 10 billion euros ($13.7 billion).
"The European Bank for Reconstruction and Development will start investing in Cyprus, most likely for a limited period, to help the country overcome transition challenges that have emerged during its severe economic crisis," said a statement.
"The agreement... assumes that the Bank will not engage in new operations in Cyprus after the end of 2020," it added.
The EBRD noted that "the Cypriot economy remains mired in a deep recession that emerged after a boom period between 2004, when Cyprus joined the EU, and 2008, when it adopted the euro".
Data released Thursday showed that Cyprus' economy contracted by 0.7 per cent in the first quarter of this year, the 11th successive quarterly decline.
"Despite making important progress towards European integration, significant transition challenges and a number of key structural issues have not been addressed," the bank added.
The EBRD said its projects in Cyprus "will aim to strengthen the financial sector, making it more robust to future shocks and improving its governance".
It added: "The Bank will also support the authorities' privatisation programme and it will assist in corporate restructuring while also providing finance to small and medium-sized enterprises, in support of the objectives of the Troika (bailout) programme."