Cyprus, one of five European countries to seek a bailout in late June, won the funding it sought of its euro zone partners on June 27. The island has been affected by its Greek debt holdings, but will soon receive the support it needs to strengthen its banks. The country is currently in talks with officials from the European Commission, the European Central Bank and the International Monetary Fund (IMF) regarding the terms of agreement and the bailout capital it needs.
“We stand ready to join the efforts of our European partners to help Cyprus return to stable and sustainable economic growth and restore a solid financial sector,” IMF Managing Director Christine Lagarde said.
While Cyprus seems to be down, it is certainly not out. The long-term outlook is much brighter than it might seem. In 2011, large natural gas deposits were found just offshore of Cyprus. One particular offshore field was found to hold at least three to eight trillion cubic feet of natural gas. This spells big money in the near future for the island. Now, in its second round of awarding gas prospecting licenses, Cyprus has 70 international companies interested in placing bids, with bidding open for a six month period from September to October.
Furthermore, Cyprus has already begun to move toward repairing its budget deficit, and is making steady progress in that regard. The budget deficit this year is estimated to fall to 2.5 percent from 6.3 percent in 2011, and Cyprus has submitted legislation to parliament for a balanced budget from 2014.
With Cyprus fresh into its first European Union Presidency, Cyprus President Demetris Christofias has determined the major priority will be the EU budget. Christofias said it is his mission, during Cyprus’s presidency, to finalize negotiations and determine a fair and effective EU budget, thus creating growth and employment opportunities.