Press Release No. 12/457

An EC/ECB/IMF mission has had productive discussions with the Cypriot authorities on the policy building blocks of a macroeconomic adjustment program. The authorities and EC/ECB/IMF teams made good progress towards agreement on key policies to strengthen public finances, restore the health of the financial system, and strengthen competitiveness, so as to pave the way for the economy to return to sustained growth and financial stability. Discussions are expected to continue from respective headquarters with a view to making further progress toward a potential program. The preliminary results of a bank due-diligence exercise, expected in the next few weeks, will inform discussions between official lenders and Cyprus on financing solutions consistent with debt sustainability.