In a move to address Non-Performing Loans (NPLs) and maximize European funds, Minister of Finance, Makis Keravnos, announced the approval of an action plan under the Recovery and Resilience Plan. The government is committed to leveraging European programs and funds, particularly those within the Recovery and Resilience Plan, to support its economic recovery.
Keravnos emphasized the importance of narrowing the gap between lending and deposit rates and revealed ongoing discussions with banks to achieve this goal. The plan's action comprises two key components. The first focuses on loan management by credit acquisition companies and specialized management firms, aligned with existing legislation. The second component involves regular progress reports to the Cabinet, tracking NPL progress relative to specified targets. The plan aims to keep NPLs below 6% and net NPLs minus provisions below 3%. Currently, both indicators stand at 5% and 2%, respectively, indicating the plan's successful execution.
Moreover, Minister Keravnos highlighted positive assessments by the international credit rating agency Standard and Poor's. Cyprus maintains its BBB investment grade, with a revised outlook from stable to positive. Standard & Poor's praised the government for maintaining fiscal surpluses and making substantial strides in reducing NPLs. Structural reforms under the Recovery and Resilience Plan are seen as key to Cyprus' economic development.