The amount of non-performing loans (NPLs) in Cypriot banks decreased by 13.3% in the third semester of 2018, a European Central Bank (ECB) report released today shows.
This is the largest decrease recorded in the EU. The second largest decrease was in Slovenia and the third was in the Republic of Ireland.
In the report, the ECB commends Cyprus on the fact that it has achieved legislative amendments to ease the sale of NPLs from banking institutions to special purpose entities.
However, the ECB says that Cyprus is among the member states which display significant inactivity on implementing fiscal reforms.
Specifically, reforms in the public sector, in local administration, in the justice sector, as well as privatisations have stalled, the ECB argues.
In addition, the Cypriot economy shows serious macroeconomic imbalances, something that the European Commission also commented on in its latest report on fiscal sustainability.